Annualize monthly interest rate
You'll need to follow these steps: Convert the interest rate as a percentage to a decimal by dividing by 100. Add 1 to the interest rate as a decimal. Raise the result to the 1/12th power because there are 12 months per year. Subtract 1 from the result to find the monthly interest rate as a Find the percentage rate per period. This is the amount of interest charged or paid each period. For example a monthly interest rate of 1 percent would be a 1 percent period interest rate. If you assume that the interest rate will remain the same for the rest of the year, you can annualize this percentage. How to Calculate Monthly Interest Divide By 12. The first step is to calculate a monthly interest rate. Amortization. That process is called amortization, and an amortization table helps you calculate Periodic Rates. As you can see, interest can be calculated monthly, daily, annually,