The interest rate your lender gives you isn't the true cost of your mortgage. Learn how to calculate your effective interest rate, including any discount points.

Before multiplying, convert the percentage to decimal format by dividing by 100. If you purchased 1,000 of the example widgets for a total cost of $40,000, multiplying by 1.50 calculates the total ...

Rather, the bills are sold at a discount to their redemption price. For example, a Treasury bill with a face value of $1,000 might sell for $985.

For example, assume a company's cash flow valuation is $300,000, the discount rate is 9 percent and you want to compound the valuation for a 10-year holding period. Add 1 to the discount rate.

It makes sense to calculate their percentage overages next. Using the same math, the materials cost was 5.4% over budget, and the equipment rental was 4.7% over budget.

Changing the loan amount in the calculator back to $200,000, and trying out a few interest rates, shows that an interest rate of 4.11% would produce that same $968 monthly payment.