How to Calculate Effective Interest Rate
John joined a bank recently where he earns a gross salary of 200000 annually. The effective interest rate is the true rate of interest earned. Effective Interest Rate Formula Interest Rates Accounting And Finance Rate Enter the interest rate into the Interest row. . Its going to get a little complicated here so feel free to skip this section if math bores you. If you know how to calculate interest rates you will better understand your loan contract with your bank. Typically lenders also add fees to the principal. You also will be in a better position to negotiate your interest rate. Convert the effective annual interest rate into quarterly compound rates using this formula. Type IPMTB2 1 B3 B1 into the cell. Periodic Interest Rate P. Follow the steps outlined below. If we compare the interest Ting gets in the previous example with the Tong gets as the interest rates compound. Example of th...