1. What is the Interest Rate Calculator?

The Interest Rate Calculator computes monthly interest for financial products in the Philippines for 2025 based on principal balance and annual interest rate.

2. How Does the Calculator Work?

The calculator uses the simple interest formula:

Where:

• \( P \) — Principal balance (PHP)
• \( R \) — Monthly interest rate (2025 rate / 12, as a decimal)
• \( I \) — Monthly interest (PHP)

Explanation: The equation converts annual rate to monthly rate by dividing by 12, then multiplies by principal to get monthly interest.

3. Importance of Interest Calculation

Details: Accurate interest calculation helps borrowers understand loan costs and helps investors project earnings from deposits or investments.

4. Using the Calculator

Tips: Enter principal in PHP and annual interest rate in percentage. All values must be positive numbers.

5. Frequently Asked Questions (FAQ)

Q1: Is this for simple or compound interest?
A: This calculates simple monthly interest. For compound interest, the calculation would be different.

Q2: Are there any fees included in this calculation?
A: No, this calculates only the interest component without any additional fees or charges.

Q3: How often should I calculate interest?
A: For most loans and deposits in the Philippines, interest is calculated monthly.

Q4: Does this account for changing interest rates?
A: No, this assumes a fixed annual rate for 2025. For variable rates, you would need to recalculate when rates change.

Q5: Is this calculator specific to Philippine financial products?
A: Yes, it's designed for financial products in the Philippines using PHP currency.