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- 1). Divide the interest paid on the account by the original amount invested. For example, if you put $3,800 in an account and it earned $300 in interest over 16 months, you would divide $300 by $3,800 to get 0.078947368.
- 2). Add 1 to the Step 1 result. In this example, you would add 1 to 0.078947368 to get 1.078947368.
- 3). Divide 1 by the number of months the money remained in the account. In this example, you would divide 1 by 16 to get 0.0625.
- 4). Raise the Step 2 result to the power of the Step 3 figure. In this example, you would raise 1.078947368 to the 0.0625 power to get 1.004760414.
- 5). Subtract 1 from the Step 4 result to find the monthly interest rate expressed as a decimal. Multiply the result by 100 to get a percentage. In this example, you would subtract 1 from 1.004760414 to get 0.004760414, then multiply it by 100. Your monthly interest rate equals about 0.476 percent.
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