Interest rates can be calculated without a calculator.
Calculating financial data such as an interest rate can seem complicated, but it is actually simple to figure this type of information out without even resorting to a calculator. In order to calculate an interest rate you will need to know the formula for doing so: r=I/(Pt) where r is the interest rate, I is the interest amount, P is the principal and t is the amount of time. You can use this formula to calculate an interest rate without a calculator using these basic steps.
Instructions
1. Write down the amount of interest that you pay for a fixed period of time. For example, if you pay $100 per year in interest, this is the figure you would use.
2. Write down the principal. The principal is the total amount of the loan.
3. Write down the time of the loan using the same time period you used to calculate the amount of interest paid. For example, if you are using the amount of interest paid annually, then list the number of years that the loan is to last.
4. Multiply the principal by the time and write down this new product. For example if the principal is $10,000 and the time is three years then the product would be $30,000.
5. Divide the interest amount that you have written down by the new product. For example, if the interest amount is $1,000 and the new product is $30,000, then this will give you a quotient of 0.034.
6. Multiply the quotient by 100 to give you the interest rate expressed as a percentage. For example, if your quotient is 0.034 then you would multiply this by 100 to get 3.4 percent. This is your interest rate over the time period that you have selected, so if you used the amount of interest paid annually this is the annual interest rate.
Tags: interest rate, amount interest, amount interest paid, interest amount, interest paid
