What is this calculator?
Solve the interest rate implied by a fixed loan payment.
What can you use it for?
Use this tool to compare a financial scenario using the assumptions you control. Solve the interest rate implied by a fixed loan payment.
How to use it
- Enter loan amount.
- Enter monthly payment.
- Enter number of payments.
- Select Calculate (or Generate for random tools).
- Read the answer and any additional results below the form. Check the units and the limits of the method.
Formula and method
Payment = principal × r ÷ [1 − (1+r)^(-n)]
A bisection search solves for the monthly rate r. Multiplying r by 1,200 expresses it as a nominal annual percentage.
Worked example
Loan amount: 100000, Monthly payment: 2500, Number of payments: 60. The result is 17.2737372% (nominal annual rate).
Assumptions and limits
Assumes equal end-of-month payments and no fees.
Frequently asked questions
What inputs does the Interest Rate Calculator need?
Use loan amount, monthly payment, number of payments. Read the answer and any additional results below the form. Check the units and the limits of the method.
What assumptions apply to the Interest Rate Calculator?
Assumes equal end-of-month payments and no fees.