Posted in Finance, Accounting and Economics Terms, Total Reads: 754
Definition: Anticipated Interest
Anticipated Interest is simply calculated as the interest due on an unchanging principal i.e. no withdrawals or additional deposits, that excludes added interest and assumes compound interest rates. It is also defined as the interest due for a loan with specified payoff date like a mortgage.
If the loan is repaid before the payoff date, the actual interest paid will be lower than the aforementioned anticipated interest. Compound interest is included in anticipated interest.
It can also be defined as the amount of interest one would receive after a certain time period, subject to no withdrawals or additional deposits. This implies that added interest is not used in the calculation of anticipated interest.