calculate monthly interest given annual interest

[6diegodiego9]

Given an annual interest of 10%, how do you calculate the equivalent monthly interest?

 

[oldbrewer]

is the interest simple or compound

normally monthly will be less than annual divided by 12 because you could re-invest the monthly interest

 

[PatOBrien198]

(1 + i)^(1/12)-1 where i is the interest rate (0.10)

 

[6diegodiego9]

I correct the question: given a linear growth in the value of your investment of 10%/year, what's the xx%/month? (how do I calculate xx?)

 

[oldbrewer]

if it grows 10% per year it grows 10/12% per month - but feb = 28 days and there are 30 and 31 day months....what a question....

 

[6diegodiego9]

if it grows 10% per year it grows 10/12% per month

not correct

 

[PatOBrien198]

not correct

You are right.

The correct formula is listed in my previous post above.

 

[Dave Patton]

Excel 2010
	A	B
1	Annual rate	10%
2		0.007974
3		0.007974
4
1a

Cell Formulas
Range	Formula
B2	=(1 +B1)^(1/12)-1
B3	=NOMINAL(B1,12)/12

Check help information for Effective interest (Effect) and Nominal interest.

 

[oldbrewer]

The real question here is what is the question ?