## Simple Interest

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Convert the percentage interest rate to a decimal interest rate by dividing by 100. For example, if the annual interest rate equals 4.4 percent, divide 4.4 by 100 to get 0.044.

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Multiply the decimal interest rate by the time the interest accrues. For example, if the money remains in the account for 1.5 years, multiply 1.5 by 0.044 to get 0.066.

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Multiply the result by the starting balance. In this example, if you start with $19,000, multiply $19,000 by 0.066 to get $1,254 of interest.

## Amortizing Interest

#### Step

Convert the percentage interest rate to a decimal interest rate by dividing by 100. For example, if the annual interest rate equals 4.4 percent, divide 4.4 by 100 to get 0.044.

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Calculate the periodic interest rate by dividing the result by the periods per year. For example, if the interest amortized quarterly, divide 0.044 by 4 to get 0.011.

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Add 1 to the periodic rate. Here, add 1 to 0.011 to get 1.011.

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Raise the sum of 1 plus the periodic rate to the number of periods over which interest compounds. In this example, since 1.5 years equals 6 quarters, raise 1.011 to the 6th power to get 1.067841841.

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Subtract 1 from the result. Here, subtract 1 from 1.067841841 to get 0.067841841.

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Multiply the result by the initial amount to find the amortized interest. Completing the example, multiply 0.067841841 by $19,000 to get $1,288.99.