How to Calculate Interest Rate

Step-by-Step Guide

1. 1

   Step 1: Plug your numbers into the interest formula IPT=R{\displaystyle {\frac {I}{PT}}=R} to get your rate.

   Once you know the basics of this equation, the math is easy.
   
   Just fill in the numbers for your loan or savings account after paying/receiving interest.
   
   This simple equation can be used to find your basic interest rate.
   
   I stands for the amount paid in interest that month/year/etc.
   
   P stands for the principle (the amount of money before interest).
   
   T stands for time periods (weeks, months, years, etc.) involved R stands for the interest rate, as a decimal.
2. 2

   Step 2: Convert the interest rate to a percentage by multiplying it by 100.

   A decimal like .34 doesn't mean much when figuring out your interest.
   
   Multiply by 100 to get a percentage.
   
   This is the percentage of every bill account of principle that is reflected in interest.
   
   So, if you got .34 as your rate before, you'd be paying 34% interest (.34∗100=34%{\displaystyle .34*100=34\%}), You should easily be able to find interest paid, the time period (when the bill/statement is from) and principle.
   
   For example, say you paid $2,344 in interest on a $12,000 loan last year.
   
   You want to know what your monthly interest rate was.
   
   To get it, you could input:
   Interest equation:
   IPT=R{\displaystyle {\frac {I}{PT}}=R} Plug in numbers: $2,344$12,000∗12mo={\displaystyle {\frac {\$2,344}{\$12,000*12mo}}=} Interest Rate Simplify equation: .01627={\displaystyle .01627=} Interest Rate Multiply by 100 to get the final percentage: .01627∗100={\displaystyle .01627*100=}1.6% monthly interest rate. , Say you're trying to figure out your monthly interest rate on a loan after one year.
   
   If you put "1" in for T, as in "one year," your final interest rate will be the interest rate per year.
   
   If you want monthly, you need to use the correct amount of time elapsed.
   
   In this case, you'd aim for 12 months.
   
   The time should be the same amount of time as the interest paid.
   
   If you're calculating a year's worth of monthly interest payments, for example, then you've made 12 payments.
   
   Make sure you check when your interest is calculated
   -- monthly, yearly, weekly, etc.-- with your bank., The interest rate for loans must be readily available when you sign up for the loan or credit card.
   
   But tricky terms like APR ("annual percentage rate," ie. "interest") and fluctuating rates may make it impossible to determine what a certain rate even means.
   
   These fluctuating rates are almost impossible to determine by hand, but free calculators online can help you find the specifics for difficult loans.
   
   Sites like Bankrate.com and CalculatorSoup are unaffiliated and trustworthy.Search online for "Your Type of Loan + Interest + Calculator." For example, find "mortgage interest calculator," "CD interest calculator" or "variable APR interest calculator."
3. 3

   Step 3: Refer to your most recent statement to fill in the interest equation.

4. 4

   Step 4: Make sure that your time and your rate are on the same scale.

5. 5

   Step 5: Use online calculators to find rates for complex loans

6. 6

   Step 6: like mortgages.

Detailed Guide

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