Interest Tax Shield Calculator

This small business tool is used to derive the interest tax using the average debt, tax rate and cost of debt.

  

Results...

Interest Tax Shield = Average debt × Cost of debt × Tax rate

Interest Tax Shield = (3500 × 2500 × (1.25/100) )

Interest Tax Shield = 109375

Interest Tax Shield Formula

The calculation of interest tax shield can be obtained by multiplying average debt, cost of debt and tax rate as shown below

Interest Tax Shield = Average debt × Cost of debt × Tax rate