1. What is the Interest Rate Calculator?

This calculator computes monthly interest for financial products in the Philippines using current rates. It helps you understand how much interest you'll pay or earn each month.

2. How Does the Calculator Work?

The calculator uses the simple interest formula:

Where:

• \( P \) — Principal balance in PHP
• \( R \) — Monthly interest rate (annual rate ÷ 12, as decimal)
• \( I \) — Monthly interest in PHP

Explanation: The formula calculates the monthly interest by multiplying the principal amount by the monthly interest rate.

3. Importance of Interest Calculation

Details: Understanding monthly interest helps with financial planning, loan repayment strategies, and comparing different financial products.

4. Using the Calculator

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

5. Frequently Asked Questions (FAQ)

Q1: Is this calculator specific to the Philippines?
A: Yes, it uses PHP currency and is designed for Philippine financial products.

Q2: Does this include compounding interest?
A: No, this calculates simple monthly interest. For compound interest, a different formula is needed.

Q3: What's the current average interest rate in the Philippines?
A: Rates vary by product and institution. Check with your bank for current rates.

Q4: Can I use this for loan and deposit calculations?
A: Yes, it works for both loans (interest you pay) and deposits (interest you earn).

Q5: How often should I recalculate my interest?
A: Recalculate whenever your principal changes or when interest rates are adjusted.