# Interest Calculation

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Registered Posts: 207 Dedicated contributor ๐ฆ
Does anybody know the formula for calculating apr into a montly rate?

Cant seem to find this in any of my books.

Cheers.

For example: APR of 18% broken into a monthly rate?

• Registered Posts: 1,954 Beyond epic contributor ๐งโโ๏ธ
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divide it by 12
• Registered Posts: 207 Dedicated contributor ๐ฆ
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lol. I wish.

Maybe i didnt explain it too well.

Its calculating the annual to compund monthly rate.

I have an annual rate of 18%

Monthly compound rate = 1.3888 (Not quite sure how i get to this anser though)?

Any idea on the calculation?
• Registered Posts: 466 Dedicated contributor ๐ฆ
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Hello,

To calculate monthly:

12th root of 1.18 = 1.013888

1.013888 - 1 = 0.013888

= 1.3888 %
• Registered Posts: 207 Dedicated contributor ๐ฆ
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Great stuff.
• Registered Posts: 466 Dedicated contributor ๐ฆ
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Hi,

This is probably obvious but you can check the calcultation the other way around eg.

1.01388^12 - 1 = 18 %
• Registered Posts: 4,071 Beyond epic contributor ๐งโโ๏ธ
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Please could any of the respondents who understand this stuff have a look at my similar query here?