Calculation of annual interest. Online interest calculator

The banking system in the modern world is an indispensable element of the economy of any country, while having a significant impact on other areas of society. Credit organizations provide the population with numerous services that are aimed at ensuring the optimal functioning of each individual.

The greatest demand is for loans and deposits. They are regulated both by the bank’s policy and by the laws of the country. Terms of provision depend on many reasons, affecting the demand of each user.

Therefore, sooner or later, a bank client becomes interested in calculating the annual interest on his deposit or loan. The very definition of “interest” depends on the type of agreement with the organization, but the essence is the same - The financial well-being of the user of the bank’s services depends on the size of the bet. For this reason, many are concerned with the question “how to calculate the annual percentage?”

Annual percentage of deposits: calculation

First of all, you should pay attention to the following section of the functions performed by the bank - deposits. The organization accepts from a person a certain amount of money for a specified period or without it at all. At the same time, the Civil Code establishes that if the client requests a refund, the organization is obliged to pay the amount with interest.

It is this condition that encourages people to open deposits. Interest on a deposit is a monetary reward paid by a credit institution for the right to temporarily use client funds.

The size, conditions and requirements for such a process are reflected in the terms of the contract. It is clear that the depositor will choose the institution in which the interest rate on the deposit will be higher. But the bank should not remain in the red.

I.Simple. When using this method, interest is not added to the deposit amount, but is transferred to the client’s account in accordance with the agreement. In this case, remuneration can be accrued every month, quarter, every six months, per year, or only at the end of the deposit term.

The calculation is quite simple and can be done independently. To do this you need to use the following formula:

S = (P x I x t / K) / 100%.

The indicators have the following interpretation:

• R – the amount of the deposit in monetary units;
• I
• t – deposit term;
• K – the number of whole days in a year.

Example: a client entered into an agreement to open a deposit in the amount of 300 thousand rubles for a period of 12 months with an annual rate of 10%. When the deposit expires, he will receive: 30,000 rubles = (300,000 x 10 x 365/365)/100%

II.Complex or deposit with capitalization. The reward is credited directly to the invested amount once a month or quarter. This helps to increase the deposit amount and, as a result, the interest on it. Thus, the size of the subsequent profit increases and takes on quite significant values.

This method has its own calculation formula, which looks like:

S = (P x I x j / K) / 100.

Wherein:

• R – initial and subsequent deposit amounts;
• I – interest rate per year on the deposit;
• j – capitalization period;
• K – the number of whole days in a year.

Example: a client entered into an agreement in the amount of 300 thousand rubles for a period of 3 months with an annual rate of 10%.

Income for the first month will be equal to: 2465 rubles = (300,000 x 10 x 30/365)/100.

In the same way, the third month: 2506 rubles = (304951 x 10 x 30/365)/100.

You can see that the profitability is getting higher every month. This pattern is explained by the capitalization of interest.

It turns out that with identical interest rates, the same deposit size and validity period, a deposit with capitalization will bring more profit than with simple interest. This should be taken into account when choosing the most effective option.

Annual loan interest: calculation

Having dealt with deposits, it is worth considering another segment of banking services - lending. This is the main function of such financial institutions. The demand for a product of this kind largely depends on the annual interest rate. It determines the amount of money that the client pays at the specified time to the organization for the right to use borrowed money.

Before answering the question “how to calculate interest per annum?”, you need to familiarize yourself with the basic concepts and nuances of lending to financial organizations:

1. Before taking out a loan, you need to carefully analyze your current and future financial condition, since the average rate in the country's banks is at 14%. Overpayments can amount to quite large amounts, as a result of which a situation may arise where it is impossible to repay the debt, which ultimately can lead to numerous losses.

1. The credit card came into use among the population of the country quite quickly and easily, as it is very convenient and profitable to use. Its feature is as follows: Interest will not accrue if the amount spent is repaid within the specified period.
2. Rates may vary depending on their condition. There are three types:

• constant - t what value remains unchanged for the entire loan repayment period;
• floating - s depends on many factors, so it can change at least every day;
• multi-level - the main criterion that determines the rate is the amount of debt.

So, having familiarized yourself with the main nuances of the interest rate in lending, you can proceed directly to its calculation.

Initially, it is worth understanding the annual interest on a credit card. For a complete understanding of the actions taken, the discussion will be carried out in accordance with the example. So, to do this operation, you need to follow the steps:

1. Check your current balance, as well as the amount of debt. The balance is 3 thousand rubles.
2. Set the cost of all components of the loan. To do this, you need to refer to the latest bank statement: 30 rubles.
3. Divide the established amount by the amount of debt: 30/3000=0.01.
4. The resulting number must be multiplied by 100. The result is an interest rate that regulates monthly payments: 0.01 x 100 = 1%.
5. To calculate the interest rate for the year, you need to multiply the answer by 12: 1% x 12 = 12%

Calculating interest on a credit card is quite simple and does not require special programs or consultants.

But things are different with mortgages:

1. Mortgage loans in terms of the calculation structure are quite complex, as they include many variables, therefore You won’t be able to be satisfied with knowing just the loan amount and the interest rate for a year.
2. Besides, Each bank may use different calculation methods from other organizations. Therefore, on almost every website of a financial institution there is a specialized calculator that allows you to make calculations in accordance with the established conditions of the organization. This function helps you analyze a wide range of banks and choose the best lending option.

1. It's worth paying special attention to the implicit charges that pop up when calculating your mortgage interest rate. The lender may hide some details of the contract and avoid disclosing them. In this case, it is highly recommended not to enter into any agreements with such banks. In order to avoid getting into an unpleasant situation, you need to have all the data on the loan that is available to the borrower.

The annual interest rate and its calculation depend on many factors: starting from the bank’s policies and ending with the state of the economy in the country. It is worth understanding that its size is influenced not only by financial indicators, but also by relations between states. Especially if this concerns deposits and loans that were concluded in foreign currency.

With such parameters, no one can assume an absolutely correct outcome in the effectiveness of one of the options. Such processes will always be accompanied by risk. But to reduce it, it is necessary to analyze the proposals of banks, study their reputation, conditions and requirements.

Do you think twenty percent of profit for the year is a little or a lot?

In the previous article about the power of capitalization, “Compound interest and the price of time,” I talked about compound interest and mentioned 20% per annum. You might think that this is not enough. Especially if you look closely at the growth of Bitcoin. In 2016, the profitability of this cryptocurrency was more than 200%. It was a lot, but that's not all. In 2017, the Bitcoin rate soared that it broke through all conceivable and inconceivable limits. However, you shouldn’t give in to your dreams and dive headfirst into cryptocurrency. Investing in cryptocurrency is still considered a very risky endeavor. Personally, I even have several friends who, succumbing to weakness, decided to play on the high volatility of the cryptocurrency and lost their money. Yes! Long-term investments in Bitcoin are still p. performed very well. It is a fact. By purchasing only $20,000 worth of Bitcoin in 2013 at a rate of $100 per piece, in 2017 you could become a dollar millionaire. In just 4 years, turn 20,000 into a million. But that is not all.

« If I knew where I would fall, I would spread straws»

Don’t forget one of the main rules of investors “ past performance does not guarantee future performance" It is unknown how Bitcoin will behave in the future. He can fall just as loudly as he took off. Therefore, it is necessary to manage risks and diversify profits.

A number of my incomes bring me 80-100% profit per year or more. Including cryptocurrency and stocks. For example, Russian shares showed excellent growth from 1999 to 2007, then there was a crisis and the rate fell. Then from 2009 to 2014 there was again excellent growth and again a decline in the second half of 2014. And new growth after the crisis. As you can see, investing in stocks is also quite a risky activity. But if you do everything correctly, manage risks, diversify and count on long-term investments, then, as the practice of many decades has shown, everything will be fine.

However, if you still think that 20% is not enough, then I will open your eyes: Warren Buffett, the richest investor in the world, claims that his average profit for his life was about 20 per annum! Moreover, he is a dollar billionaire! He simply understood the power of compound interest early and used it for many decades!

Bank deposits

One of the safest options that comes to mind is to put money on deposit in a bank and receive interest on deposits. However, bank deposits do not provide such a profit of 20% per annum. It will not be possible to live on them due to inflation, for example. Most often, the interest rate on bank deposits is lower than inflation, and less often it is slightly higher than real inflation. For 2017, you can count on 7-9% per annum on bank deposits. During the 2014 crisis, they were close to 16%, now there is a trend towards a decrease and everything is heading towards the fact that it may soon become 5 percent or less if a new crisis does not break out. In addition, in Russian banks the risk is higher than in Western ones. However, don't look at banks with skepticism. Banks can be a good support for storing the so-called safety cushion, but they are not worth a solid investment.

If banks on average give less than 10 percent per annum, then why am I talking about 20% per annum? Because this is more than any reputable bank in the world can give. And anyone can put money in a bank; you don’t need to be a genius to do this, it’s enough to be an average resident of an average country. You and I can do more!

If you do the same thing as everyone else, you will have the same things as everyone else...

Exercise to consolidate information about annual profit:

Open Excel or a similar program. Create a table with 5 columns. Calculate how much your initial amount will increase each year for 50 years. I will attach my started and unfinished file as an example.

Let's say you have 100,000 rubles! Not a bad amount to start with, let's see what it does at 5%, 10%, 20% and 30% per annum over 50 years.

Play around with the table and numbers. But don't think this is child's play. This game, like many others, teaches us about life and can have a significant impact on understanding the process of increasing personal capital. Think of it as planning for your future.

Finally, answer the questions:

1. After how many years will your initial capital increase:
   1. 2 times
   2. 10 times
   3. 100 times
   4. 1000 times
2. How long will it take for annual profits to exceed the amount of initial capital?
3. After how many years will your annual interest income exceed your annual expenses and allow you to live off the interest without working?

After answering these questions, you will understand that the amount of money you can earn depends not on the amount of initial capital, but on how quickly you can increase it. That is, it depends on how effectively your money works for you. From the level of financial literacy, success as an investor, knowledge. There is enough money on our planet for everyone. But they increase not among those who have a lot of them in their wallets, but among those who see them growing in their heads! Many highly paid artists and athletes cease to be millionaires after finishing their careers because they do not know how to make money work for themselves.

We won't make that mistake! We will talk about what is necessary on the path to wealth in the following topics.

Stay in the Investor's Path project.

Greetings! I am sure that I do not have to know and be able to do everything in the world. Yes, this is impossible in principle. But in the most important areas for a person it is worth navigating at least at the “teapot” level.

I consider work, business, family, health and, of course, money to be vital areas. What am I getting at? Moreover, any investment requires. Even if it’s a banal bank deposit or a loan for business development.

To be honest, I haven’t done such calculations manually for a very long time. For what? After all, there are a lot of convenient applications and online calculators. As a last resort, a “fail-safe” Excel table will help out.

But it doesn’t hurt to know the elementary formulas for basic calculations! Agree, interest on deposits or loans can definitely be classified as “basic”.

Below we will recall school algebra. It must be useful at least somewhere in life.

We calculate the percentage of the deposit amount

Let me remind you that interest on a bank deposit can be simple or complex.

In the first case, the bank accrues income on the initial deposit amount. That is, every month/quarter/year the depositor receives the same “bonus” from the bank.

Of course, the calculation formulas for simple and compound interest differ from each other.

Let's look at them using a specific example.

Return on deposit with simple interest

• Amount % = (deposit*rate*days in the billing period)/(days in the year*100)

Example. Valera opened a deposit in the amount of 20,000 rubles at 9% per annum for one year.

We will calculate the profitability of the deposit for a year, month, week and one day.

Interest amount for the year = (20,000*9*365)/(365*100) = 1800 rubles

It is clear that in our example, the annual profitability could be calculated much more simply: 20,000 * 0.09. And as a result, you get the same 1800 rubles. But since we decided to count according to the formula, then we will count according to it. The main thing is to understand the logic.

Interest amount for the month (June) = (20,000*9*30)/(365*100) = 148 rubles

Amount of interest for the week = (20,000*9*7)/(365*100) = 34.5 rubles

Amount of interest per day = (20,000*9*1)/(365*100) = 5 rubles

Agree, the simple interest formula is elementary. It allows you to calculate the return on a deposit for any number of days.

Return on deposit with compound interest

Let's complicate the example. The formula for calculating compound interest is a little more sophisticated than in the previous version. The calculator must have a power function. Alternatively, you can use the degree option in the Excel table.

• Amount % = contribution * (1+ rate for the capitalization period) number of capitalizations - contribution
• Rate for the capitalization period = (annual rate*days in the capitalization period)/(number of days in a year*100)

Let's return to our example. Valera placed the same 20,000 rubles on a bank deposit at 9% per annum. But this time - .

First, let's calculate the rate for the capitalization period. According to the terms of the deposit, interest is accrued and “added” to the deposit once a month. This means that we have 30 days in the capitalization period.

Thus, the rate for the capitalization period = (9*30)/(365*100) = 0.0074%

Now we calculate how much our contribution will bring in the form of interest for different periods.

Interest amount for the year = 20,000*(1+0.0074) 12 – 20,000 = 1,850 rubles

We raise it to the power of “12” because the year includes twelve periods of capitalization.

As you can see, even with such a symbolic amount and a short period of time, the difference in the profitability of a deposit with simple and compound interest is 50 rubles.

Interest amount for six months = 20,000*(1+0.0074) 6 – 20,000 = 905 rubles

Interest amount for the quarter = 20,000*(1+0.0074) 3 – 20,000 = 447 rubles

Monthly interest amount = 20,000*(1+0.0074) 1 – 20,000 = 148 rubles

Note! Capitalization of interest does not in any way affect the profitability of the deposit for the first month.

The investor will receive the same 148 rubles with both simple and compound interest. Differences in profitability will begin from the second month. And the longer the deposit term, the more significant the difference will be.

Before we stray too far from the topic of compound interest, let's check how fair one of the recommendations of financial advisors is. I mean the advice to choose not once every six months or quarter, but once a month.

Suppose our conditional Valera placed a deposit for the same amount, term and at the same rate, but with interest capitalized every six months.

Rate = (9*182)/(365*100) = 0.0449%

Now we calculate the return on the deposit for the year.

Interest amount for the year = 20,000*(1+0.0449) 2 – 20,000 = 1,836 rubles

Conclusion: all other things being equal, semi-annual capitalization will bring Valera 14 rubles less than monthly capitalization (1850 - 1836).

I understand that the difference is very small. But our other initial data is symbolic. For large amounts and long periods, 14 rubles will turn into thousands and millions.

We calculate the percentage of the loan

We move from deposits to loans. In fact, the loan calculation formula is no different from the basic one.

Example. Yuri took out a consumer loan from Sberbank in the amount of 100,000 rubles for 2 years at 20% per annum.

• Amount % = (debt balance*annual rate*days in the billing period)/(number of days in a year*100)

Interest amount for the first month = (100000*20*30)/(365*100) = 1644 rubles

Amount of interest for one day = (100000*20*1)/(365*100) = 55 rubles

Note! Along with the balance of debt, the amount of interest on the loan decreases. In this regard, the differentiated scheme is much “fair” than the annuity scheme.

Now suppose our Yuri has repaid half of his loan. And now the balance of his debt to the bank is not 100,000, but 50,000 rubles.

How much will his interest burden decrease?

Monthly interest amount = (50,000*20*30)/(365*100) = 822 rubles (instead of 1644)

Amount of interest for one day = (50,000*20*1)/(365*100) = 27 rubles (instead of 55)

Everything is fair: the debt to the bank has decreased by half - the “interest” burden on the borrower has decreased by half.

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Clients of financial institutions regularly encounter the concept of interest rates. The annual rate is used when calculating loans and opening deposits. In the first case, the borrower pays money to the bank, and in the second, the financial institution rewards the client for the deposit placed. The article discusses calculations that relate to deposits with and without interest capitalization.

You can perform calculations using a calculator or using MS Excel.

The need for calculations arises in cases where the client wants to know the amount of profit. Based on the result, we can draw a conclusion about the relevance of contacting the bank. Also a client who knows how to calculate 15 per annum from the amount, will be able to verify the honesty of the bank.

Without a doubt, the entire accrual process occurs automatically. But no one is immune from incorrect operation of the system, and more often than not, failures occur to the detriment of the client.

If we are talking about a deposit without capitalization, then the calculations are performed using the elementary formula:

С = (Св x % x Дн)/Дг, where

• C – amount of interest;
• St – total deposit amount;
• % - rate (for example, 10% per annum - 0.10);
• Day – the number of days in a year when interest will be accrued;
• Dg – total number of days.

To determine the value of Dn, you need to look into the contract. It must indicate the number of days for which the financial institution will accrue interest.

To understand the issue, it is better to look at examples. So, the client issues 500,000 rubles from the bank for six months at 10% per annum. This raises the question: 10 percent per annum, how much per month will the investor receive income?

If we talk about the nuances, then it all depends on the number of days, which can be 30 and 31.

So, in the first case, the investor will receive 4,109.58 rubles, and in the second - 4,246.57. The basis for calculations are the formulas:

1. (500,000 x 0.1 x 30)/365;
2. (500,000 x 0.1 x 31)/365.

In this case, we consider a year with 365 days. You also need to take into account that February has fewer days.

Second example. Calculation of the total interest amount. For the entire period, the bank client will receive 49,863.01: calculation of interest per annum formula– (500,000 x 0.1 x 364)/365. The formula indicates 364 days, since the day of closing the deposit does not provide for the accrual of interest. It is important to read the agreement carefully, since the day the account was opened may also not be taken into account.

You also need to focus on a more complex calculation. For example, a bank client had 500,000 rubles in his account on March 1. On March 14, he replenished the deposit with 50,000 rubles, and on March 20, he withdrew 450,000.

The deposit rate is 8%. The first step is to calculate the number of days during which the money was in the deposit account. According to the conditions, the following results can be presented:

• 500,000 – 13 days;
• 550,000 – 6 days;
• 70,000 – 11 days.

Calculations are performed as follows: (500,000 x 0.08 x 13) + (550,000 x 0.08 x 6) + (70,000 x 0.08 x 11)/365 = 2,316.71 rubles.

There is also a formula for this that anyone can figure out, even without economic education. The formula has the following form Sp = St x (1+%) k – St, where:

• Sp – deposit amount;
• % - interest during the capitalization period;
• k – number of capitalization periods.

Exponentiation can be done on a calculator, computer, or mobile device. To understand the calculations, you need to refer to examples. So, the client places 500,000 rubles in the investment fund under 30 per annum is how much per month?

To calculate monthly income, you need to get the rate during capitalization for the month: % = 0.3 x 1/12 = 0.0250. Now the calculation is performed using the formula: 500,000 x (1+0.0250) 12 – 500,000 = (500,000 x 1.344) – 500,000 = 172,000 rubles. To simplify calculations with exponentiation, you can use online services.

For bank clients who often have to take out loans or make deposits, it is much easier to use Excel. The computer program is very quick to set up.

The user will only have to specify certain values, so how to calculate annual interest the program will be in automatic mode.

Using software, you can significantly save time and get the most accurate results, eliminating the human factor.

Many readers may ask a pressing question: why perform such calculations yourself, since there are calculators on the website of almost any bank. Indeed, annual interest on the amount can be calculated using an online calculator from a banking institution or a third-party service. With the help of such calculators, you can calculate almost everything, from the interest on annuity payments to the effective annual rate.

The problem is that no one except the site owners can know what formulas are included in the online calculator.

It is not known in whose favor the calculator testifies. But this does not mean that all calculators lie. The user only needs to test the calculator several times and use it on an ongoing basis. It will not be difficult to perform the check, so how to calculate Everyone can earn interest on their deposit after reading this article.

After reading the material and considering examples of calculations, anyone will be able to check how honestly the bank calculates interest on the deposit.

It would seem that such a prospect seems absurd - after all, even leading banking institutions can guarantee such profitability only in annual rates. However, people who have an idea of ​​​​different investment tactics understand perfectly well that even 20.0% per month is not the limit of financial fantasies.

Are there any options?

There are certainly options. And there are several of them. But before you start investing your capital in these projects, you need to gain an understanding of all the accompanying circumstances. And they are like this:

• High income parameters are often associated with high risks;
• High returns on short-term intervals are also accompanied by high risks.

And both of these characteristics are obvious when receiving an income of 15-20% per month. But that’s not all - obtaining such a profit is rarely possible without professional skills and sufficient experience. Of course, for these cases there is a method of trust capital management, special management funds and companies. But finding them will take time and you need to be prepared for this.

And if after this the desire to invest at 20% per month still remains, you can familiarize yourself with the most common methods of such profitable investment. And as practice and statistics of Internet search queries show, the relevance of this prospect is very high and many, despite all the difficulties and circumstances, would like to have such a source of income.

Where can you invest at 15-20% per month?

When choosing an investment direction at such high interest rates, one should not forget not only about the risks, but also about the volume of investments. Unfortunately, not all projects want to deal with deposits that resemble pocket money.

However, one of the prospects in this direction allows you to start investing at high interest rates even with a few dollars in your pocket or account.

PAMM investing

The most technologically advanced method to receive 20.0% per month. With this method of investment, activities are mainly carried out with foreign currency assets. However, the managing trader may well withdraw the investor’s money to stock exchanges by purchasing options, shares and contracts. The profitability of this method depends on the category. In particular, so-called pamm indices have appeared in the practice of many brokerage companies providing this service. Their peculiarity is that investments are entrusted to several managers at once, which guarantees the safety of money - after all, each of them enters into transactions according to an individual strategy.

Drawing a logical conclusion, you can focus on more reliable and stable investments. PAMM accounts and PAMM indexes make it possible to earn large profits on the Forex market through currency speculation. In this case, you do not need to have special education. And although you will have to pay part of the income to the manager as a bonus, the profitability can still reach 15-20% per month.

Hype

Traditionally, in RuNet, such projects are called financial pyramids. There are also matrix schemes that are somewhat different from the multi-level investment system. What can such investment instruments guarantee to investors? First of all, profitability in the short term. Such projects do not last long, since there are not many people willing to participate in such financial events. This means that it becomes more and more difficult to form each next level of referral subscribers. The profitability here can really be at the level of 15-20 percent, and sometimes even higher. But we must also remember the risks. There are two main categories of risks in HYIPs:

a) Short-term existence of the project;

b) Common fraudulent schemes.

These two factors are quite enough to seriously think about the prospects of such investments.

Sports betting

Another promising investment field in terms of profitability. You can earn 20% on bets at bookmakers not only in a month, but also in one sports tournament. But here too there are difficulties. Firstly, such an activity is very closely related to the risk of excitement. And such passions are not approved not only in the family, but also at the state level. Secondly, making a forecast for the outcome of a match, duel or race is simply unrealistic - these earnings are more reminiscent of casino games. Therefore, here you can not only invest money at high interest rates, but also lose it all in one day.

Securities

This is a more civilized and economically sound method of investing at a high interest rate. Moreover, you can engage in this activity not only through stock brokerage companies, but also on the Internet, using the trading terminal of one of the stock brokers. The profitability of this activity is also quite high. But the risks here are no less. But having experience and professional skills in analyzing stock assets, it is easy to predict the growth of certain securities. Depending on their liquidity, the volume of purchased shares or other instruments, as well as the current value, you can get a profitability higher than 15-20% per month. As for risks, they are mainly caused by changes of an economic nature, which is easy to predict and provide methods for minimizing losses.