Interest Per Month Calculator
The interest per month calculator divides your annual rate by 12 to get the monthly rate, then applies it to a principal to show your monthly and total interest.
Last updated 2026-08-15
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quizExample
How this calculator works, with real numbers (no JavaScript needed):
Inputs
- Annual interest rate
- 12
- Principal amount
- 50000
- Time period
- 12
Results
- Monthly interest rate
- 1%
- Monthly interest
- ₹500
- Total interest
- ₹6,000
functionsThe formula
An annual interest rate is quoted for the year, but most loans and savings accounts charge or credit interest monthly. Converting is a simple division.
The formula
Monthly rate = annual rate ÷ 12
Monthly interest = principal × monthly rate ÷ 100
Worked example
A loan of ₹50,000 at 12% per annum:
Monthly rate = 12 ÷ 12 = 1%
Monthly interest = 50,000 × 1% = ₹500
Over 12 months: 500 × 12 = ₹6,000 total interest
Simple vs compound
This calculator uses simple interest — the same principal every month. In reality:
- Loans amortize: you pay interest on a shrinking balance, so interest declines each month (see the EMI calculator).
- Fixed deposits compound: interest is added to the principal, so each month earns a little more (see the FD calculator).
For monthly budgeting, simple interest is a great ballpark — for exact repayment, use the amortizing loan calculators.
Converting the other way
Have a monthly rate and want the annual? Multiply by 12: a 1% monthly rate ≈ 12% per annum (nominal) or about 12.68% effective when compounded monthly.
helpFrequently asked questions
question_markHow do I calculate the monthly interest rate from annual?
Divide the annual rate by 12. A 12% annual rate is a 1% monthly rate. This is the nominal rate; compounding can make the effective annual rate slightly higher.
question_markHow much interest do I pay per month on a loan?
Multiply your remaining balance by the monthly rate: ₹50,000 × 1% = ₹500 in the first month. As you repay, the interest portion falls — the EMI calculator shows this month by month.
question_markWhat is the difference between nominal and effective interest rate?
The nominal rate is the stated annual rate. The effective rate accounts for monthly compounding, so it is slightly higher — 12% nominal ≈ 12.68% effective.
question_markDoes the interest rate per month apply to savings too?
Yes — bank FD and savings accounts quote annual rates but credit interest monthly or quarterly. Use this calculator to see what a month of interest adds up to.