# Calculate interest rate based on interest in parcels

• Feb 17th 2011, 09:38 AM
douglasrac
Calculate interest rate based on interest in parcels
Hi,

I'm having problems to calculate interest for a payment in 6 parcels.

Here are the values, without interest and with interest.

http://s3.postimage.org/subouguph/payment.jpg

How can I calculate the interest rate?
It's also possible that the value is like X + Y%. So, it's a fixed amount, like 5 plus the interest rate.

Thank you for any directions.
• Feb 17th 2011, 09:38 PM
Volga
If I understood the question correctly, you pay off a loan in six installments, each installement includes a repayment of principal and interest.

Interest is usually calculated on the outstanding amount, therefore, you should prepare a schedule which shows:

balance at the beg of period
repayment in the period (principal and interest)
interest accrued in the period (on the amount still outstanding)
balance at the end of period

Then you try and see different rates for the interest which one would fit your figures. Also, it is important to understand whether repayment happens at the beginnig or end of each period.