Finally, we multiply the rate by 100 to convert it into percentage terms: Interest Rate = 8.33%. We can use another formula to check our work. This is called the present value of a perpetuity formula.

The formula used to calculate the effective annual interest rate is: (1 + i/n) n – 1. where i = the stated annual interest rate and n = the number of compounding periods.

Everything you need to know to calculate an interest rate with the present value formula. S&P 500 +---% | Stock Advisor +---% Join The Motley Fool. Accessibility Log In ...

Calculating the interest rate using the present value formula can at first seem impossible. However, with a little math and some common sense, anyone can quickly calculate an investment's interest ...

In 1648, a Dutch government authority issued a bond that promised to pay interest forever. Written on goatskin, five such bonds are known to exist today. Yale University owns one, andin 2015 ...

Calculating the interest rate using the present value formula can at first seem impossible. However, with a little math and some common sense, anyone can quickly calculate an investment's interest ...