Budgeting & Debt
Monthly interest
The annual rate spread over twelve months.
The Formula
Monthly = Balance x APR / 12
The annual rate spread over twelve months.
| Symbol | Meaning | Unit | Notes |
|---|---|---|---|
| B | Balance | currency | Amount currently owed. |
| r | APR | rate | Annual percentage rate as a decimal. |
What Each Symbol Means
Bcurrency
Balance
Amount currently owed.
rrate
APR
Annual percentage rate as a decimal.
See It Worked With Real Numbers
A formula on its own does not tell you which number goes where. The how to calculate credit card interest page applies this equation to a concrete case, shows every intermediate step, and names the mistakes that produce a wrong answer even when the algebra is right.
Where This Formula Appears
This equation is the working core of How To Calculate Credit Card Interest, filed under Finance. Every number the guide produces comes from substituting into this one line.