FUNDAMENTALS OF COMPUTER

Detailed explanation-1: -To calculate a monthly interest rate, divide the annual rate by 12 to reflect the 12 months in the year. You’ll need to convert from percentage to decimal format to complete these steps. Example: Assume you have an APY or APR of 10%. What is your monthly interest rate, and how much would you pay or earn on $2, 000?

Detailed explanation-2: -Simply divide your APY by 12 (for each month of the year) to find the percent interest your account earns per month. For example: A 12% APY would give you a 1% monthly interest rate (12 divided by 12 is 1).

Detailed explanation-3: -Divide your interest rate by the number of payments you’ll make that year. If you have a 6 percent interest rate and you make monthly payments, you would divide 0.06 by 12 to get 0.005. Multiply that number by your remaining loan balance to find out how much you’ll pay in interest that month.

Detailed explanation-4: -To convert annual rate to monthly rate, when using APR, simply divide the annual percent rate by 12.

Detailed explanation-5: -If it’s simple interest, divide the annual interest rate (i) by 12 to get your monthly rate. Why? Because there are 12 months in a year. If it’s compound interest, which it generally is, take the annual interest rate (r) and raise it to the reciprocal of 12 to get your monthly rate.