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How to Convert Interest Rate

Updated on March 4, 2018

Calculate interest rate

The interest rate is made up of two values: the percent and the number of days in which this percentage is realized. We will produce a template with which we can recalculate the interest rate according to the difference in number of days. There are two ways of calculating interest rate: proportional and conform. The first is the regular interest bearing account, and the other compound. This means that the basis for the calculation takes the interest calculated in the previous period. Also, the conversion must take into account the accounting method, since in some cases there are significant differences. Thus, the interest rate 1% for 1 day is in 365 days 365% in proportional method and 3678% in conformal method.

We make the template. Please note the columns and rows so you can copy the formula.

Calculate interest rate conformal method

First, we will perform the calculation of conformal method. This method is more accurate, but because of its’ complexity it is used less frequently than proportional method.

Copy the formula in cell A8

=(((1+A3/100)^(A5/B3))-1)*100

Calculate interest rate proportional method

Copy the formula in cell B8

=(A3/B3)*A5

As you can see the result in a proportional manner is completely different. Such major difference accrues when a period of calculation is very short and the interest rate is very high.

Convert annual interest rate to monthly

Convert monthly interest rate to annual

Calculate inflation rate

This calculation can also be used for conversion of inflation. Often we come across information: "Inflation in February was 0.3%." February in normal year has 28 days, we are interested in what this means on an annual basis (in 365 days). For the calculation we are using conformal method.

Convert an annual inflation rate into a monthly rate

Convert a monthly inflation rate into a annual rate

Were you surprised that 1% per day is 3678% per year ?

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Some examples of conversion rates

Interest rate - %
Interest rate - days
New interest rate - days
New interest rate - % conformal
New interest rate - % proportional
0.1
1
365
44.03
36.50
0.5
1
365
517.47
182.50
1
1
365
3678.34
365.00
0.1
30
365
1.22
1.22
0.5
30
365
6.26
6.08
1
30
365
12.87
12.17
1
365
30
0.08
0.08
2
365
31
0.17
0.17
5
365
32
0.43
0.44
8
365
33
0.70
0.72
10
365
34
0.89
0.93
12
365
35
1.09
1.15
15
365
36
1.39
1.48
0.1
28
31
0.11
0.11
0.4
28
31
0.44
0.44
0.1
31
28
0.09
0.09
0.4
31
28
0.36
0.36

Estimated time of preparation and production

Prep time: 10 min
Cook time: 35 min
Ready in: 45 min
Yields: Calculator interest rates

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