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July 3rd, 2018, 03:21 PM   #1
Joined: Oct 2014

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Relationship between monthly and annually based interest rate?

My question is quite simple like if I know that the interest I have got from a bank this month is x then can I say that the annual interest rate which I will get from the bank is 12 multiplied by x. I am asking this because sometimes you don't just add up the percentage and actually you do something else like successive discounts we do x + y - xy/100.

Please correct my calculation here.

My bank has credited interest - 51.45 on the deposited amount 28,500.81.

This means that the interest I got paid for that month was - (51.45/28500.81)*100 = 0.180 %
for that month. So, annual interest rate I am getting is

0.180 % * 12 = 2.166

Is my calculation correct? I am not confident about it that's why I am asking it on the forum.
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July 3rd, 2018, 06:07 PM   #2
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2.166% annual, compounded monthly.
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