Interest Rate Calculator
Solve for interest rates, APY, and effective annual rates.
Calculation Type
Investment Details
Interest Rate Types
Calculating: Interest Rate from Growth
Interest Rate
Nominal annual rate
Effective Annual Rate (APY)
With compounding effects
Monthly Rate
Per month
Daily Rate
Per day
Total Return
Profit/interest earned
Annualized Return
Per year
Compounding Periods
Total compounding events
How it works
An interest rate calculator solves for the rate when you know the other loan or investment terms — the principal, the payment, and the number of periods. Because the rate is buried inside the time-value formula, it's found by iteration, then annualized.
Solving for the rate
Find r in: M = P · r(1 + r)ⁿ / [(1 + r)ⁿ − 1] Annual rate = r × periods
- P
- principal
- M
- payment per period
- n
- number of payments
Worked example
- Borrow $10,000, repay $200/month
- For 60 months
- Solve for the monthly r that fits
- Annualize: r × 12
≈ 7.4% annual interest rate.
Good to know
- Compare loans by APR, which includes fees, not just the bare interest rate.
- There's no clean algebraic solution for the rate, so calculators iterate to find it.
- A small rate difference compounds into large money over a long term.
Related Calculators
Frequently Asked Questions
How do I work out the interest rate from a starting and ending balance?
Solve the compound growth equation for the rate: r = (FV/PV)^(1/t) − 1 with annual compounding. Growing $10,000 into $15,000 over 5 years implies (1.5)^(1/5) − 1 ≈ 8.45% per year. The calculator adjusts the math for other compounding frequencies.
What's the difference between nominal and effective interest rates?
The nominal rate ignores compounding; the effective rate includes it: effective = (1 + r/n)ⁿ − 1. A 12% nominal rate compounded monthly is really 12.68% effective — the honest annual cost or yield.
What is APY?
Annual Percentage Yield is the effective annual rate on deposits — what you actually earn in a year including compounding. Banks advertise APY on savings products precisely because compounding makes it slightly higher than the nominal rate.
What's the difference between APR and APY?
APR is a nominal annual rate (on loans it also folds in certain fees) without compounding; APY includes compounding. The same account quoted both ways shows APY ≥ APR, with the gap growing as compounding becomes more frequent.
Why does my loan cost more than its advertised rate suggests?
Origination fees, points, and compounding all raise the true cost above the headline number. Comparing loans by APR — and deposits by APY — puts offers on a common footing, which is exactly why regulators require those disclosures.