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TimeValue Software Blog

Year End Accruals for Compound Interest Loans

By Martel Pellerin

At the end of the year, we have customers call for assistance with compound interest loans (Normal Amortization) who ask “How do I calculate my year-end interest accruals or interest paid?” With compound interest loans and irregular payments, this can be challenging, but there is an alternative way to calculate them. Let’s show you how TValue can assist in calculating year-end interest accruals and interest paid.

With TValue, you can make a couple of changes to the schedule to accomplish this. First, you will want to select U.S. Rule (simple interest) as the Compute Method. When you use simple interest, your amortization schedule will show the Interest Accrued and Interest Paid.

Second, you can also take another step to make a true calendar year by making a zero payment at the end of each year to show the exact interest accrued and paid for a 365-day calendar year. By inputting a zero payment at the end of the prior year-end, you accrue the interest through that year-end. This allows the following 12 months payments to accrue the interest for the entire calendar year. For accruing interest, the Interest Accrued column will give you the correct annual amount. The Interest Paid column is the amount for cash basis taxpayers for their interest income or expense.

Year End Accruals for Compound Interest Loans Blog image

Please note that a zero payment on the non-regular payment date could slightly change the monthly interest calculation. It should only be used to build the schedule for year-end interest paid or interest accrued calculations, not to manage the loan.

These steps will help you to calculate the year-end interest accruals and interest paid for a compound interest loan with either regular or irregular payments using TValue software.

If you have any questions using TValue, please feel free to give our Support Team a call at 800-426-4741 or email