How do I calculate how much interest I earned on my Convertible Note?

The calculation of interest differs with each note. To determine how to calculate the interest, you must review the terms of the note to figure out what type of interest it is (simple interest, compounding interest - compounding monthly, quarterly, yearly, etc.) then calculate based on the length of time. Interest is usually a very small part of your return, so it is OK to estimate it and then, after the deal is concluded, double-check against the actual numbers and make any edits necessary.

For more details on calculating interest earned, check out our Convertible Note Checklist - Adding an Interest Paid in Stock Transaction.

Learn how to record Interest.

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