Bank loan interest is calculated based on compound interest, while deposit interest is calculated based on simple interest. There are two types of interest calculation: simple interest calculation and compound interest calculation. Let’s introduce the calculation methods of these two types of interest respectively:

Simple interest calculation:

Simple interest calculation The interest is calculated only on the principal, and the interest does not accrue. The total interest is proportional to the borrowing time. The interest calculation formula when calculating simple interest is:

L=P×n×i

The sum of principal and interest after n interest calculation periods is:

Fn=P (1 i×n)

The interest on personal savings deposits and treasury bills in my country is calculated based on simple interest, and the interest calculation period is "year".

Compound interest calculation:

Compound interest calculation means that for a certain interest calculation period, interest is calculated based on the principal plus the accumulated interest in the previous interest calculation period. That is, "interest regenerates interest."

my country's real estate development loans and housing mortgage loans are based on compound interest. Since compound interest is more in line with the actual movement of funds in the process of social reproduction, compound interest is generally used in investment analysis.

Compound interest calculation can be divided into discontinuous compound interest and continuous compound interest. If the interest calculation period is a certain time interval (such as year, quarter, month, etc.) and interest is calculated based on compound interest, it is called discontinuous compound interest; if the interest calculation period is shortened indefinitely, it is called continuous compound interest. Theoretically, funds are constantly moving and adding value every moment through the fields of production and circulation. Therefore, continuous compound interest should be used to calculate interest. However, in actual use, the simpler method of intermittent compound interest is used to calculate interest. .

The bank's various interests are calculated based on interest rates. There are roughly two types of interest rates, namely loan interest rates and deposit interest rates.

Deposits can be divided into demand deposits and time deposits. The annual interest rate of demand deposits is 0.35; time deposits are divided into four forms, namely lump sum deposits, lump sum withdrawals, and lump sum deposits Withdraw and deposit principal and interest;

If you choose the lump sum deposit and withdrawal method, the annual interest rate for three months of deposit is 1, the annual interest rate for 1 and six months is 1, and the annual interest rate for 3 and one year is 1 1. The annual interest rate for two years is 2.75. 1. The annual interest rate for three years is 2.75;

Choose three methods: zero deposit and lump sum withdrawal, lump sum deposit and lump sum withdrawal, and principal deposit and interest withdrawal. , the annual interest rate of deposit for one year is 1,1, and the annual interest rate of deposit for three years is 1,3. The annual interest rate for various loans for one year and more than one year is 4.35, the annual interest rate for one to five years is 4.75, and the annual interest rate for more than five years is 4.9; provident fund loans for five years and less than five years have an annual interest rate of 4.75. The annual interest rate is 2.75, and the interest rate for more than five years is 3.25. The above interest rates are the benchmark interest rates issued by the central bank. Each bank will make appropriate adjustments based on this interest rate. The specific interest rates shall be subject to bank regulations.

When choosing a deposit or loan, you should pay attention to choosing the one that suits you. If you don't understand anything, ask in time to avoid more troubles.