Interest Rate

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What is Interest Rate ?

• The rate of amount paid by the borrowers to the
  lenders for the money borrowed.

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• You need to pay a certain amount as monthly
  payments with this interest rate for the amount
  you borrowed from the lender.
• It is expressed in

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Do you know how to calculate it ?
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Interest Rate Calculation

• Your inputs would be Initial Payment, Monthly
  Payment and Number of Years.
• Initial Payment
• The amount borrowed from lender.
• Monthly Payment
• The amount paid to the lender monthly till
  the term gets completed.
• Number of Years
• The number of years you will pay the amount
  to the lender.

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Interest Rate Formula

• The formula used for the interest rate
  calculation is
• i ( 1 ( P/A ) ) 1/q - 1 q
  - 1
• Where,
• q log 1 (1/N) / log2
• N n 12 (here n number of
  years)
• P Payment Amount
• A Initial Amount
• N Number of Payments

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Interest Rate Calculation

• Consider your initial payment is Rs. 30000,
  monthly payment is 500 and the number of years
  would be 6.

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• Apply all the values in the formula
• i ( 1 ( P/A ) ) 1/q - 1 q - 1
• 6.24

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• Find it more easier to calculate with an Interest
  Rate Calculator.
• https//www.easycalculation.com/mortgage/interest-
  rate.php