FUNDAMENTALS OF COMPUTER

Detailed explanation-1: -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). A 1% APY would give you a 0.083% monthly interest rate (1 divided by 12 is 0.083).

Detailed explanation-2: -Monthly Interest Rate Calculation Example 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.

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: -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.

Detailed explanation-5: -To convert an annual interest rate to monthly, use the formula “i” divided by “n, ” or interest divided by payment periods. For example, to determine the monthly rate on a $1, 200 loan with one year of payments and a 10 percent APR, divide by 12, or 10 ÷ 12, to arrive at 0.0083 percent as the monthly rate.