For example: deposit 100 yuan,

The bank promised to pay an annual interest rate of 4.2%

Then the bank will pay 4.2 yuan interest next year.

The calculation formula is 100×4.2% = 4.2 yuan.

The formula is: interest rate = interest ÷ principal ÷ time × 100%.

Interest = principal × interest rate× time

= 100 × 4.2 %=4.2 yuan.

The final withdrawal 100+4.2= 104.2 yuan.

Extended data:

Influencing factors of annual interest rate:

1, central bank policy

Generally speaking, when the central bank expands the money supply, the total supply in loanable funds will increase, the supply exceeds demand, and the natural interest rate will decrease accordingly; On the contrary, the central bank implements a tight monetary policy, reducing the money supply, so that loanable funds's demand exceeds supply, and interest rates will rise accordingly.

2. Price level

Market interest rate is the sum of real interest rate and inflation rate. When the price level rises, the market interest rate also rises accordingly, otherwise the real interest rate may be negative. At the same time, due to rising prices, the public's willingness to deposit will decrease, while the loan demand of industrial and commercial enterprises will increase. The imbalance between deposit and loan caused by loan demand exceeding loan supply will inevitably lead to an increase in interest rates.

3. Stock and bond markets

If the securities market is on the rise, the market interest rate will rise; On the contrary, interest rates are relatively low.

4. International economic situation

Changes in a country's economic parameters, especially changes in exchange rates and interest rates, will also affect interest rate fluctuations in other countries. Naturally, the rise and fall of the international securities market will also bring risks to the interest rates faced by international banking business.

Baidu encyclopedia-annual interest rate