How to calculate the deposit interest rate?

The calculation formula of interest: principal × annual interest rate (percentage) × deposit period.

Calculation formula of deposit interest: principal * interest rate * term?

Note: the interest rate unit should be consistent with the term. For example, the annual interest rate, the term should be based on the number of years; Monthly interest rate, the term should be in months; For daily interest rates, the term should be in days. ?

Annual, monthly and daily interest rate conversion: monthly interest rate = annual interest rate/12; Daily interest rate = monthly interest rate /30= annual interest rate /360.

Interest rate:

Interest rate refers to the ratio of the amount of interest to the amount of borrowed funds, that is, the principal, in a certain period of time. Interest rate is the main factor that determines the capital cost of enterprises, and it is also the decisive factor for enterprises to raise funds and invest. To study the financial environment, we must pay attention to the current situation and changing trend of interest rates.

Refers to the ratio of the interest amount due in each period to the par value of the borrowed, deposited or borrowed amount (called the total principal). The total interest of the lent or borrowed amount depends on the total principal, interest rate, compound interest frequency and the length of time of lending, deposit or borrowing. Interest rate is the price that the borrower needs to pay for the money borrowed, and it is also the return that the lender gets by delaying his own consumption and lending it to the borrower. The interest rate is usually calculated by the percentage of one-year interest to the principal.

The interest rate policy affects the exchange rate by affecting the current account. When interest rates rise, credit is tight, loans are reduced, investment and consumption are reduced, and prices are lowered. To a certain extent, imports are suppressed, exports are promoted, foreign exchange demand is reduced, foreign exchange supply is increased, and foreign exchange rate is reduced and local currency exchange rate is increased. Contrary to the rise in interest rates, when interest rates fall, credit expansion and money supply (M2) increase, which stimulates investment and consumption and pushes up prices, which is not conducive to exports and is beneficial to imports.

The impact of exchange rate changes on interest rates is also indirect, that is, it indirectly affects interest rates by affecting domestic price levels and short-term capital flows.

References:

Calculation of interest rate of Baidu Encyclopedia entries