Converting an Annual Interest Rate to a Monthly Interest Rate
This is the math needed to calculate the interest rate you get on a savings account per month when you know the interest rate per year.
A savings account earns an annual rate of 3.95%. What is the monthly interest rate?
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Convert the Percentage to a Decimal
To convert a number into a decimal, take the number without the percent sign and divide by 100.
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Change to a Monthly Rate
Take the answer (.0395) and divide by 12 (the number of months).
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Convert Back to a Percent
Take the monthly rate and multiple by 100.
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Answer
Your interest rate per month is .33%.
Related Article
Interest Rates, Compounding, and APY