Kokonaiskorko

Kokonaiskorko on term used in Finnish finance to denote the total amount of interest accumulated over a specified period on a loan or an investment. It reflects the cumulative cost or return from interest alone, not including other fees unless stated. It depends on the rate, the compounding frequency, and the duration.

For investments, kokonaiskorko can be calculated with compound interest: if P is the principal, r the nominal annual rate, m the number of compounding periods per year, and t the number of years, then kokonaiskorko = P[(1+r/m)^(m t) - 1]. Example: investing 1000 at 5% annual rate compounded monthly for 3 years yields a kokonaiskorko of about 161.05.

For loans showing amortization, kokonaiskorko equals the total of all interest payments made over the term. If the loan is amortized with fixed payments A for n periods, total interest = A n − P. The sum may differ from simple multiplication due to principal reductions.

Relation to other concepts: The term is related to the nominal rate but is not the same as the annual percentage rate (APR) or the effective annual rate (EIR). APR/EIR annualizes the cost or return including fees and compounding; kokonaiskorko is the cumulative interest over the chosen period.

Practical note: Because it depends on assumptions about rate stability and term, kokonaiskorko is a planning metric rather than a single universal constant. It can help compare loans or savings options but should be interpreted with the underlying terms.