Q:

How do you calculate interest?

A:

To calculate interest, multiply the periodic interest rate by the principle amount. For example, if you borrowed \$1000 with an interest rate of 10 percent, in a year your interest paid is \$100.

Keep Learning

Find your interest rate in your financial records for the product for which you are calculating interest.

2. Multiply the interest rate by the principle amount

For example: \$1000 in principle times 0.1 (10 percent periodic interest rate) equals \$100.

Once you determine the amount of interest, check with your bank or other institution to confirm that your rate does not vary.

Sources:

Related Questions

• A: Compound interest is a financial term used to describe the process where the interest earned on a principal investment over a set period of time is added t... Full Answer >
Filed Under:
• A: The advertised or nominal interest rate on a mortgage is used to calculate the interest incurred on the amount of the loan, and the annual percentage rate ... Full Answer >
Filed Under:
• A: To calculate your mortgage payment manually, apply the interest rate (r), the principal (B) and the loan length in months (m) to this formula: P = B[(r/12)... Full Answer >
Filed Under:
• A: Real interest rate is calculated by adjusting for the effects of inflation when compared to the nominal interest rate. The calculation formula is simple, a... Full Answer >
Filed Under:
PEOPLE SEARCH FOR