1. What is the Interest Rate Calculator?

The Interest Rate Calculator computes monthly interest for financial products in the Philippines using the 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 (annual rate / 12, as a decimal)
• \( I \) — Monthly interest (PHP)

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

3. Importance of Interest Calculation

Details: Accurate interest calculation helps borrowers understand their payment obligations and helps investors project their earnings.

4. Using the Calculator

Tips: Enter principal in PHP, annual interest rate in percentage. All values must be valid (principal > 0, rate between 0-100%).

5. Frequently Asked Questions (FAQ)

Q1: Is this calculator specific to the Philippines?
A: Yes, it uses PHP currency and common Philippine financial calculation methods.

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

Q3: What's the difference between annual and monthly rate?
A: The annual rate is divided by 12 to get the monthly rate for calculation.

Q4: Can I use this for loan calculations?
A: This calculates only the interest portion. For full loan amortization, you'd need a more comprehensive calculator.

Q5: How accurate is this calculation?
A: It provides a basic estimate. Actual financial products may have additional fees or different calculation methods.