For example, if the interest rate of a loan is 5% and the calculation period is months, then the annualized interest rate = (5 %×12 )×100% = 60%. Simple interest refers to the interest calculated according to the fixed interest period. The annualized interest rate refers to the interest rate calculated in years, including all possible interest income and financial expenses within one year. There are many formulas for calculating annualized interest rate, but the basic principle is the same.