What is the Annual Interest Rate?

The Annual Interest Rate (AIR) is a yearly rate of interest calculated as a percentage of the principal amount of a deposit or loan. It is one of the core measures of the time value of money in the financial sector and directly affects the calculation of the amount of interest.

Common types of interest rates

Annual Percentage Rate (APR)： Expressed as a percentage of the principal (e.g. 5%), often used for long-term savings or loans. Monthly interest rate： Annual interest rate ÷ 12, expressed as a percentage (e.g. 0.42%, which corresponds to an annual interest rate of 5%). Daily interest rate： Annual interest rate ÷ 365, expressed as a percentage in millions (e.g. 0.014%, which corresponds to an annual interest rate of 5%).

Functional description of the calculator

The tool supports: - calculating interest rates based on Principal, APR, Term (days/months/years) automatic calculation of total interest and principal/interest. - Conversion of annualized yield to facilitate comparison of investment returns of different maturities. - Suitable for time deposits, financial products, credit loans and other scenarios.

Example

If you make a deposit of 10,000 RMB with an annualized interest rate of 3.5% and a term of 180 days: Interest = Principal × Annualized Interest Rate × (Days ÷ 365) = 10,000 × 3.5% × $172.6(180÷365) ≈ 172.6 Yuan

Note: The calculation results are theoretical values, the actual returns may be affected by taxes, compounding rules and other factors.