How do you figure out Interest Rate?

How do you figure the compounding interest rate on a loan to a family member I want to charge 5 compounded interest but 5 compunded ea mo adds up a lot in the end This is a loan against an inheritance?

• Answer:

  It is better to let a banking institution deal with this. This happened to my husband and his younger brother. The inheritance was held up because of Probate. Instead of loaning his brother the money out of his own pocket he and his younger brother went to the bank and produced the death certificate and a copy of the will to the bank and they loaned his brother the money (after he signed papers that what money they loaned him came out of the inheritance right off the top.) The bank compounds the interest rate. If you personally loan this family member the money then you may get stuck with paying it. Try doing the above and keep it between the family member and the bank. You need to establish 3 key points 1. The loan amount. 2. The interest rate. 3. The time agreed to repay you the loan. Let's say $100,000 at 5% and it must be paid back in 10 years. Without going into all the calculations (I'll post the link for you) The repayments would be $1060.67 per month for 10 years. http://www.anz.com/common/calculators/loanrepayment/exampleau.asp#profile