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How to calculate interest rate per annum

Updated February 21, 2017

Calculating the interest rate per annum isn't that difficult if you know three things: the principal amount; the interest rate; and the time period in years. Knowing the equation for figuring per-annum interest will help you know what the interest rate will be on a loan of any size before you sign on the dotted line.

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  1. Multiply the principal by the rate of interest. For example, using £5,525 as the amount of principal and .0325 as the rate of interest, the calculator will display 276.25.

  2. Multiply that figure by the time. In this example, use two years. The calculator will display 552.50. This is the total interest that will be charged on the loan.

  3. To figure the monthly interest, divide £359.1 by 24 months.

  4. Tip

    Remember the equation P x R x T (principal times rate times time).

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About the Author

Linda Batey has been working as a freelance writer for more than two years, specializing in travel, gardening, and herbal and home remedies. She has been published in "Gardening Inspirations" magazine and various online sites. Batey holds an associate degree in paralegal from Beal College. She also is knowledgeable is

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