How Simple Interest Works: An Example Suppose you take out a $5,000 loan at 6% interest for two years. To calculate the amount of interest you will pay, use the simple interest formula above.

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.

Those tariffs, and rising inflation, could prompt the Federal Reserve to lower interest rates. The "core" inflation rate, which excludes food and energy prices, was 2.9% in the 12 months through June.