The difference between monthly interest rate and annual interest rate;

1, different units

The annual interest rate is in years, and the interest rate is in months, where the monthly interest rate = annual interest rate12.

2. Different representations

The annual interest rate is expressed as a percentage of principal, and the monthly interest rate is expressed as a few thousandths.

3. Different calculation methods

Annual interest rate = principal * loan interest rate * time, annual interest rate = principal * loan interest rate * loan time means monthly repayment.

If the principal is 5000 yuan and the annual interest rate is 7.47%, the interest generated by 1 year is: 5000 * 7.47% * 1 = 373.5 yuan.

The principal is 5000 yuan and the monthly interest rate is 6.225%. The monthly interest is 5000 * 6.225% *1= 31.125 yuan.

Therefore, the principal of 5000 yuan and the principal and interest for one year are: 5000+373.5=57373.5 yuan. The principal is 5,000 yuan, and the principal and interest for one month is: 5000+31.125 = 5031.125 yuan.

Difference between annual interest rate and monthly interest rate of bank loans

The difference is that the annual interest rate is higher than the monthly interest rate.

1, monthly interest rate, interest is calculated on a monthly basis, generally expressed as one thousandth. Monthly interest rate = annual interest rate/12.

2. Annual interest rate, that is, annualized rate of return. Deposit money in the bank, the annual interest rate refers to the deposit interest rate for one year, and the annual interest rate is expressed as a percentage of the principal. Take Jianye as an example: the one-year bank deposit interest rate is 1.75%. If you save 10 thousand yuan a year, what's the interest? According to, interest = principal x interest rate x time. One-year bank deposit interest =10000 *1.75% *1=175 yuan.

Extended data:

The loan interest rate is the interest rate charged by banks and other financial institutions to borrowers when granting loans. There are roughly three categories: the loan interest rate of the central bank to commercial banks; The loan interest rate of commercial banks to customers; Interbank lending rate

The determinants of bank loan interest are:

1, bank cost. Any economic activity needs cost-benefit comparison. There are two types of bank costs: borrowing costs-prepaid interest on borrowed funds; Additional cost-the cost of normal business.

2. Average profit rate. Interest is the subdivision of profit, which must be less than the profit rate, and the average profit rate is the highest limit of interest.

3. Supply and demand of loan funds. If the supply exceeds the demand, the loan interest rate will inevitably fall, and vice versa.

In addition, the loan interest rate must also consider price changes, securities returns, political factors and so on. However, some scholars believe that the highest limit of interest rate should be the marginal rate of return of funds. The factor that restricts the interest rate is the comparison between the profit growth rate after the enterprise borrows from the bank and the loan interest rate. As long as the former is not lower than the latter, enterprises may borrow money from banks.

Is the bank loan interest rate calculated by year (annual interest rate) or by month (monthly interest rate)?

Interest on bank loans is calculated on an annual and monthly basis. It's just that the interest rates published by banks are generally annual interest rates.

Sometimes bank interest is calculated by the day. For example, some customers pay in advance, which is not an integer month, and the bank may calculate interest according to the actual number of days.

Also, because the loan applied for in the bank is usually repaid monthly, the interest is basically calculated monthly. Taking banks as an example, the average capital repayment method and the equal principal and interest repayment method are mainly adopted. Both repayment methods calculate interest on a monthly basis.

It is precisely because the interest of bank loans is generally calculated on a monthly basis, and the interest given by banks is basically the annual interest rate, so when calculating the interest of the current month, it is necessary to convert the annual interest rate into the monthly interest rate first, and then calculate it.

The annual interest rate can be easily converted into monthly interest rate, and vice versa. Annual interest rate = monthly interest rate ×12; Monthly interest rate = annual interest rate/12. As for the daily interest rate, it should be converted into monthly interest rate or annual interest rate. The formula is: daily interest rate = monthly interest rate /30= annual interest rate /360.

Bank loan interest rate refers to the ratio of interest amount to principal amount during the loan period. The interest rate in China is managed by the People's Bank of China. The bank loan interest rate refers to the benchmark interest rate determined by the People's Bank of China, and the actual contract interest rate can fluctuate within a certain range based on the benchmark interest rate.

The interest rate of loan contracts with banks and other financial institutions as lenders can only be determined through consultation within the upper and lower limits of interest rates stipulated by the People's Bank of China. If the loan interest rate is high, the repayment amount of the borrower will increase after the loan term, otherwise, it will decrease. The benchmark interest rate is a universally applicable reference interest rate in the financial market, and other interest rate levels or financial asset prices can be determined according to this benchmark interest rate level.

Benchmark interest rate is one of the important prerequisites for interest rate marketization. Under the condition of interest rate marketization, financiers need a universally recognized benchmark interest rate level as a reference to measure financing costs, investors to calculate investment income and management to carry out macro-control. Therefore, in a sense, the benchmark interest rate is the core of the formation of interest rate marketization mechanism.

The benchmark interest rate must have the following basic characteristics:

(1) marketization. Obviously, the benchmark interest rate must be determined by the relationship between market supply and demand, which not only reflects the actual market supply and demand, but also reflects the market's expectations for the future;

2 basic. The benchmark interest rate is in a fundamental position in the interest rate system and the price system of financial products, and it has a strong correlation with the interest rates of other financial markets or the prices of financial assets.

③ transitivity. The market signal reflected by the benchmark interest rate, or the regulatory signal sent by the central bank through the benchmark interest rate, can be effectively transmitted to other financial markets and financial product prices.

Interest rate marketization means that the interest rate level of financial institutions operating and financing in the money market is determined by market supply and demand. It includes interest rate determination, interest rate transmission, interest rate structure and interest rate management marketization.

In fact, it is to hand over the decision-making power of interest rate to financial institutions, which will adjust the interest rate level independently according to the capital situation and the judgment of financial market trends, and finally form a market-oriented interest rate system and interest rate formation mechanism based on the benchmark interest rate of the central bank, with the money market interest rate as the intermediary, and the deposit and loan interest rates of financial institutions determined by market supply and demand.