This interest rate calculator works backwards from a loan's payment, amount, and term to find the rate being charged.
Finance
Interest Rate Calculator
Back out monthly and annual rates from principal, payment and term.
Calculator
About this calculator
Formula notes
Solve r in payment = P·r(1+r)ⁿ/((1+r)ⁿ−1) numerically; also reports the effective annual rate with compounding.
Worked examples
- Example: borrowing 10000 repaid at 2997/month for 36 months implies about 5% nominal, or 5.12% effective.
- If $20,000 grows to $23,185 over 3 years with annual compounding and no contributions, the implied annual rate is about 5.1%.
How to use it
- Enter the loan amount, monthly payment, and term.
- Read the solved nominal annual rate.
- Check the effective rate for the true yearly cost.
Frequently asked questions
Why solve numerically?
The payment formula cannot be rearranged for r in closed form, so iteration finds it.
Nominal vs effective — which matters?
Effective includes intra-year compounding, so it is the honest comparison number.
Limits and interpretation
- Reverse-solving a rate assumes the selected compounding model and cash-flow pattern are correct.
- Taxes, fees, irregular deposits, withdrawals, and changing rates make a single implied rate an incomplete performance measure.