How to Calculate Hourly Compounding Interest. Knowing how to calculate hourly compound interest is useful in evaluating the utility of short-term loans and other financial options. Once you know the value of certain variables, making the correct calculation is merely a function of plugging the values into a simple formula.

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Determine the value of the following amounts: the initial value of the loan, the hourly compound interest rate, and the number of hours that have elapsed since compound interest began accruing. These three values correspond to the variables L, i and h respectively.

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Insert these values into the following formula: L times (1 + i)^h = F. F represents the total amount owed on the loan, including the compound interest.

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Solve the formula for F. If you only want to know the amount of interest that has accrued independent of the initial value of the loan, subtract the value of L from the value of F.