# Personal loan 92

Difficulty: Moderate

Directions

1 Divide the interest charged through the quantity you owe on your personal loan to find the regular attention rate. For instance, if you need a \$3,500 personal loan plus you pay \$25 a calendar month within interest, divide \$25 by \$3,500 to get 0.0071428571428571.

2 Add 1 to the personal loan regular interest rate. On this example, add 1 to 0.0071428571428571 to get 1.0071428571428571.

3 Increase the effect to the Xth power, where X equals the number of expenses per year. Here, since you produce monthly payments also there are 12 months each year, raise 1.0071428571428571 to the 12th power to obtain 1.089163111.

4 Subtract 1 from the result to find the compound yearly attention rate as a decimal. In this example, take away 1 from 1.089163111 to get 0.089163111.

5 Multiply the personal loan element annual interest rate expressed because a decimal through 100 to transform to a percentage. Finishing this example, multiply 0.089163111 by 100 to discover the annual compound interest rate on the personal loan equals just about 8.92 percent.

References

School regarding Arizona: Compound Interest and APY DePaul University: Compound Interest Formula

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