Hi. This is Kyle from in a day development welcome to our video tutorial on a yr or interest rate per year iy r or interest rate per year represents the rate of return your money earns when it's loaned out or the rate of return you're paying someone else when you borrow their money Excel and some other calculators require you to enter the periodic interest rate but the 10 B 2 wants the yearly rate if you're dealing with 6% per year and you simply enter 6 into IR you don't need to divide it before entering let's say that you set up a two-year loan on which you'll make monthly payments monthly payments means that we need P Y R to be 12 you can see your p yr setting in the bottom of your calculators display two years is 24 months.
We put 24 into n you're borrowing $25,000.
We put 25,000 into PV it's positive because. This is money we're receiving you've agreed to pay $1,200 per month for the money.
We put negative 1200 into PMT. This is a negative number because. This is money we're paying out at the end of the two years the loan will be completely paid off.
You put 0 into FV then we hit IR to find out how much interest we're being charged on the loan we get thirteen point nine seven which means that you're borrowing at thirteen point nine seven percent Interest depending upon how you like that number you may want to ask for different terms if it's to pay off a credit card that's charging you thirty two point nine nine percent right now that's a great improvement but if you're refinancing a car which is currently financed at seven percent it's pretty steep thanks for watching and make sure you get your 10 b2 financial calculator app from the App Store for iPhone iPad Android and Mac OS if you have any questions about this example please feel free to email us at the team at in a day development com.