1. What is the Monthly Interest Calculation?

The monthly interest calculation determines how much interest you'll pay on your credit card balance in Kenya for a given month, based on your principal balance and annual percentage rate (APR).

2. How Does the Calculator Work?

The calculator uses the simple interest formula:

Where:

• \( I \) — Monthly interest (KES)
• \( P \) — Principal balance (KES)
• \( R \) — Monthly interest rate (APR / 12, as decimal)

Explanation: The annual percentage rate (APR) is divided by 12 to get the monthly rate, then multiplied by the principal balance to calculate the monthly interest charge.

3. Importance of Interest Calculation

Details: Understanding your monthly interest helps in budgeting and financial planning, showing the true cost of carrying credit card debt in Kenya.

4. Using the Calculator

Tips: Enter your current credit card balance in KES and the annual percentage rate (APR) as shown on your statement. All values must be valid (balance > 0, APR ≥ 0).

5. Frequently Asked Questions (FAQ)

Q1: How is APR different from interest rate?
A: APR includes both the interest rate and any additional fees, representing the total annual cost of borrowing.

Q2: Why is my interest higher than calculated?
A: Some Kenyan cards use daily compounding or charge additional fees not reflected in this simple calculation.

Q3: How can I reduce my monthly interest?
A: Paying more than the minimum payment reduces your principal balance, which directly lowers interest charges.

Q4: Is this calculation accurate for all Kenyan credit cards?
A: Most cards use this method, but check your card's terms as some may use daily periodic rates.

Q5: Does this include Kenya's excise duty on credit?
A: No, this calculates only the base interest. Kenya's 20% excise duty on credit would be additional.