Learn the formula I = P*T*R/100, where "I" stands for interest, "P" for principal, "T" for time and "R" for rate. The rate can also be written as a decimal. In this example, the interest rate is 10 1/2. Convert 1/2 to a decimal to obtain 10.5. Divide that number by 100 to get the rate in decimal form, 0.105.
Substitute the numbers into the formula. For example, a businessman borrows $500 to buy a printer. This is the principal. He will repay the loan in two years, at a rate of 10 1/2 percent. So the principal = 500, time = 2 and rate = 10.5/100. Plugging in the numbers, you get 500 * 2 * 0.105. So the interest is $105.
Remember this is interest for the whole year. To find out the monthly interest, divide the interest amount by the total time stated in months. So 105/24 which equals $4.38 per month.