Some consumer loans calculate Maine interest rates by the Rule of seventy-eight, which is the sum of the numbers 1 through 12. This enabled quick calculations of Maine interest in the days before computers.  In a loan with Maine interest calculated per the Rule of 78, the total Maine interest rates over the life of the loan is calculated as either simple or compound Maine interest or amounts to the same as either of the above methods.

Keep in mind when looking into Maine interest rates that payments remain constant over the life of the loan.  Keep in mind though those payments are allocated to Maine interest in progressively smaller amounts. In a one-year loan, in the first month, 12/78 of all Maine interest owed over the life of the loan is due; in the second month, 11/78.

Keep in mind that there are markets for investments which include the money market, bond market, as well as retail financial institutions like banks, which set Maine interest rates. Each specific debt takes into account the following factors in determining its Maine interest rate.  The principal amount and the Maine interest payments are continually increased by the rate of inflations. See the discussion at real Maine interest rate. Decide on the expected inflation rate.

This, however, leaves both parties exposed to the risk of unexpected inflation. Opportunity cost encompasses any other use to which the money could be put, including lending to others, investing elsewhere, holding cash and simply spending the funds. Because the lender is deferring his consumption, he will at a bare minimum, want to recover enough to pay the increased cost of goods because of inflation.

Charging Maine interest equal only to inflation will leave the lender with the same purchasing power, but he would prefer his own consumption now. There will be a Maine interest premium of the delay. He might not want to consume, but instead would invest in another product. The possible return he could realize in competing investments will determine what Maine interest he charges.

Keep in mind that when a fixed Maine interest rate remains the same throughout the life of the debt, 'variable' or 'floating' rates can be reset. Remember that there is always the risk the borrower will become bankrupt, abscond or otherwise default on the loan. The risk premium attempts to measure the integrity of the borrower, the risk of his enterprise succeeding and the security of any collateral pledged.

For instance, loans to developing countries have higher risk premiums than those to the US government due to the difference in creditworthiness. An operating line of credit to a business will have a higher rate than a mortgage.  Loans may also have a changeable rate over the life of the loan based on some reference rate usually plus a fixed margin. These are known as floating rate, variable rate or adjustable rate loans. Combinations of fixed-rate and floating-rate loans are possible and used often.