Paid-in-Kind Interest Calculator

✖Paid-in-Kind Interest Rate is a type of interest payment where the borrower has the option to pay the interest due by issuing additional debt rather than making cash payments.ⓘ Paid-in-Kind Interest Rate [PIK%]			+10% -10%
✖Beginning PIK Debt Balance represents the amount of debt on which PIK interest has been capitalized or added to the principal.ⓘ Beginning PIK Debt Balance [BPIKdb]			+10% -10%

✖Paid-in-Kind Interest is defined as the amount of interest expense charged by a lender which accrues towards the ending debt balance.ⓘ Paid-in-Kind Interest [PIK]

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Formula

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Paid-in-Kind Interest

Formula

`"PIK" = "PIK%"*"BPIKdb"`

Example

`"10400"="0.40"*"26000"`

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Paid-in-Kind Interest Solution

STEP 0: Pre-Calculation Summary

Formula Used

Paid-in-Kind Interest = Paid-in-Kind Interest Rate*Beginning PIK Debt Balance
PIK = PIK%*BPIKdb
This formula uses 3 Variables

Variables Used

Paid-in-Kind Interest - Paid-in-Kind Interest is defined as the amount of interest expense charged by a lender which accrues towards the ending debt balance.
Paid-in-Kind Interest Rate - Paid-in-Kind Interest Rate is a type of interest payment where the borrower has the option to pay the interest due by issuing additional debt rather than making cash payments.
Beginning PIK Debt Balance - Beginning PIK Debt Balance represents the amount of debt on which PIK interest has been capitalized or added to the principal.

STEP 1: Convert Input(s) to Base Unit

Paid-in-Kind Interest Rate: 0.4 --> No Conversion Required
Beginning PIK Debt Balance: 26000 --> No Conversion Required

STEP 2: Evaluate Formula

Substituting Input Values in Formula

PIK = PIK%*BPIKdb --> 0.4*26000

Evaluating ... ...

PIK = 10400

STEP 3: Convert Result to Output's Unit

10400 --> No Conversion Required

FINAL ANSWER

10400 <-- Paid-in-Kind Interest

(Calculation completed in 00.004 seconds)

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Credits

Created by Vishnu K

BMS College of Engineering (BMSCE), Bangalore

Vishnu K has created this Calculator and 200+ more calculators!

Verified by Aashna

IGNOU (IGNOU), India

Aashna has verified this Calculator and 10+ more calculators!

< 16 Debt Management Calculators

Levered Free Cash Flow

Go Levered Free Cash Flow = Net Income+Depreciation and Amortization-Change in Net Working Capital-Capital Expenditure-Net Borrowing

Present Value of Outstanding Balance

Go Present Value of Outstanding Balance = Existing Payment*(1-(1+Rate of Interest per Annum)^(-Frequency of Payments)/Rate of Interest per Annum)

Home Equity Line of Credit

Go Maximum Line of Credit = Maximum Loan to Value Ratio*Appraised Fair Value of Equity-Outstanding Mortgage Balance

Breakeven Occupancy

Go Breakeven Occupancy Ratio = (Total Operating Expenses+Annual Debt Service)/Potential Gross Income

Average Payment Period

Go Average Payment Period = Average Accounts Payable/(Credit Purchases/Number of Days in Period)

Paid-in-Kind Interest

Go Paid-in-Kind Interest = Paid-in-Kind Interest Rate*Beginning PIK Debt Balance

Senior Debt Ratio

Go Senior Debt Ratio = Senior Debt/EBIT and Depreciation and Amortization

Mortgage Refinance Breakeven Point

Go Mortgage Refinance Breakeven Point = Total Loan Costs/Monthly Savings

Debt Service Coverage Ratio

Go Debt Service Coverage Ratio = Net Operating Income/Annual Debt

Mortgage Constant

Go Mortgage Constant = Annual Debt Service/Total Loan Amount

Solvency Risk Ratio

Go Solvency Risk Ratio = Total Assets/Total Long Term Debt

Loan Constant

Go Loan Constant = Annual Debt Service/Total Loan Amount

Debtor Days

Go Debtor Days = (Accounts Receivable/Credit Sales)*365

Annual Debt Service

Go Annual Debt Service = Principal+Interest Amount

Net Debt

Go Net Debt = Gross Debt-Cash and Cash Equivalents

Overhead Rate

Go Overhead Rate = Overhead Costs/Revenue

Paid-in-Kind Interest Formula

Paid-in-Kind Interest = Paid-in-Kind Interest Rate*Beginning PIK Debt Balance
PIK = PIK%*BPIKdb

What is Paid-in-Kind Interest?

Paid-in-Kind Interest is a type of interest which allows borrowers to conserve cash flow in the short term, as they are not required to make cash interest payments. However, it can lead to a higher total debt burden over time since the unpaid interest is capitalized and added to the principal amount. As a result, interest is then calculated on this new, higher principal balance, increasing the overall cost of borrowing.
Paid-in-Kind Interest is often used in financing arrangements for companies with limited cash flow or those in distressed financial situations. It can also be found in high-yield bonds, mezzanine financing, or other types of non-traditional financing structures.
Investors and lenders should be aware of the implications of PIK Interest as it can increase the risk associated with the loan or investment.

How to Calculate Paid-in-Kind Interest?

Paid-in-Kind Interest calculator uses Paid-in-Kind Interest = Paid-in-Kind Interest Rate*Beginning PIK Debt Balance to calculate the Paid-in-Kind Interest, The Paid-in-Kind Interest refers to the interest on a loan or debt instrument that is not paid in cash but is instead accrued and added to the principal amount of the loan. Paid-in-Kind Interest is denoted by PIK symbol.

How to calculate Paid-in-Kind Interest using this online calculator? To use this online calculator for Paid-in-Kind Interest, enter Paid-in-Kind Interest Rate (PIK%) & Beginning PIK Debt Balance (BPIKdb) and hit the calculate button. Here is how the Paid-in-Kind Interest calculation can be explained with given input values -> 10400 = 0.4*26000.

FAQ

What is Paid-in-Kind Interest?

The Paid-in-Kind Interest refers to the interest on a loan or debt instrument that is not paid in cash but is instead accrued and added to the principal amount of the loan and is represented as PIK = PIK%*BPIKdb or Paid-in-Kind Interest = Paid-in-Kind Interest Rate*Beginning PIK Debt Balance. Paid-in-Kind Interest Rate is a type of interest payment where the borrower has the option to pay the interest due by issuing additional debt rather than making cash payments & Beginning PIK Debt Balance represents the amount of debt on which PIK interest has been capitalized or added to the principal.

How to calculate Paid-in-Kind Interest?

The Paid-in-Kind Interest refers to the interest on a loan or debt instrument that is not paid in cash but is instead accrued and added to the principal amount of the loan is calculated using Paid-in-Kind Interest = Paid-in-Kind Interest Rate*Beginning PIK Debt Balance. To calculate Paid-in-Kind Interest, you need Paid-in-Kind Interest Rate (PIK%) & Beginning PIK Debt Balance (BPIKdb). With our tool, you need to enter the respective value for Paid-in-Kind Interest Rate & Beginning PIK Debt Balance and hit the calculate button. You can also select the units (if any) for Input(s) and the Output as well.

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