Convert yearly interest rate to monthly excel
To convert a yearly interest rate for annually compounding loans, you can simply divide the annual interest rate into 12 equal parts. So, for example, if you had a loan with a 12 percent interest rate attached to it, you can simply divide 12 percent by 12, or the decimal formatted 0.12 by 12, in order to determine that 1 percent interest is essentially being added on a monthly basis. This article looks at common errors in calculating interest rates correctly. As a model auditor for over 30 years, you start to recognise and look out for common errors in financial spreadsheets. One common are of malignant modelling is the inability of many analysts to convert an annual interest rate into a monthly or quarterly rate correctly.