4.25% annual interest rate The formula for calculating interest is: principal * annual interest rate * loan term (year). For example, Mr. A borrows 50,000 yuan with an annual interest rate of 4.25%. The loan term is one year, and the total interest for one year is calculated. Generally, there are two repayment methods: matching principal and interest and average capital, so the total interest of matching principal and interest is 1 185.94, and that of average capital is 1 178. 13. If the interest is calculated according to the formula, it is 50000 * 4.25% *1= 2125 yuan.