How to Determine an Interest Rate With a Calculator

The interest rate on a loan or credit is the amount the funds you borrow will cost you in the long run. The rate is usually a percentage of the principle, or amount borrowed, calculated over time. You can determine what your interest will be if you know the rate, and a calculator will speed this process considerably. It is always a good idea to keep up with your interest payments, especially if the interest you owe is compounded (added to the principle)--causing you pay a whole lot more over time.

Instructions

1

Determine the amount of the loan or credit extended.

2

Multiply the amount of the loan by the interest rate using the calculator. The percentage should be entered as a decimal (i.e. 5 percent is .05). If you borrow $10,000 at 5 percent interest per year, the interest is $500 annually.

3

Calculate simple interest over time by multiplying the amount of the interest for a given period by the total number of these periods in the term of the loan. For instance, if you have a $10,000 loan at 5 percent annually for five years, this would come out to $500 annually times five years, or $2,500.