The annualized loan interest rate can be calculated by compound interest or simple interest, and the simple interest calculation method is simple interest. Simple interest means that no matter how long the deposit period of the fund is, only the interest of the principal is charged, and the interest of previous periods is not charged in the next interest period.
Annualized interest rate refers to the interest rate discounted to the whole year through the inherent rate of return of products. The annualized interest rate of the loan shall be calculated according to the ratio of all loan fees charged to the borrower to the actually occupied loan principal, and converted into annualized form.
Simple interest means that no matter how long the deposit period of the fund is, only the interest of the principal is charged, and the interest of previous periods is not charged in the next interest period. When calculating simple interest, the following symbols are often used: p- principal, also known as initial amount or present value; I- interest rate, usually refers to the ratio of annual interest to principal; I- interest; F- the sum of principal and interest, also known as the sum or final value of principal and interest; N-the number of interest periods, usually in years. The calculation formula of simple interest is interest (I)= principal (P)× interest rate (i)× number of interest-bearing periods (n). When calculating interest, unless otherwise specified, the interest rate given refers to the annual interest rate. Less than one year's interest, one year is equal to 360 days.
According to people's use requirements, the calculation of simple interest can be divided into final value and present value. Calculation of the final value of simple interest: the final value of simple interest is the sum of the principal and interest of a certain fund at a certain point in the future calculated according to simple interest method. The formula for calculating the final value of simple interest is: F=P+P×i×n =P×( 1+i×n). Calculation of the present value of simple interest; In real economic life, it is sometimes necessary to determine its present value according to the final value, that is, the present value. The formula for calculating the present value of simple interest is: P=F-I=F-P×i×n=F/( 1+i×n). Both annual interest rate and annualized income are used to calculate the income generated by wealth management products in one year. The interest rate and discount rate of annualized income are different. The annual interest rate is calculated on an annual basis. The annualized interest rate may be 1 day, 1 week to 365 days, which can be converted into one-year interest.