In this paper, interest rates and methods of interest calculation are presented. Mathematical operations and relations used in simple and compound interest calculation are shown. Decursive and anticipatory methods and examples of calculating interest in a simple and compound way, and their concrete significance applicable in practice are presented. Related to this, the types and methods of calculating interest rates are discussed and their impact is explained. Also, the interest rates that are calculated if the period of the given nominal interest rate does not coincide with the period in which the interest is calculated are explained. In the last chapter continuous compounding is described. Continuous compounding calculates interest under the assumption that interest will be compounding over an infinite number of periods. Although continuous compounding is an essential concept, it's not applicable in the banking practice.