Interest Rate Calculator
Solve for the implied interest rate from principal, payment and term. Free tool that finds the rate a loan or investment is really charging you.
About the Interest Rate Calculator
Sometimes you know the loan amount, the payment and the term but not the rate — for instance a shop offers 'buy now, pay in 12 instalments' without stating an interest rate. This free interest rate calculator solves for the rate hidden inside those numbers, so you can see what you are really being charged.
There is no closed-form formula for the rate, so the calculator solves it numerically: it searches for the periodic rate that makes the present value of all payments equal the principal, then annualises it. This is the same method behind a spreadsheet's RATE function.
Borrowers checking instalment offers, investors working out the return implied by a price and a payout, and students learning the time value of money all use this. Everything runs in your browser with no signup.
How to Use the Interest Rate Calculator
- 1Enter the principal (loan amount or amount invested).
- 2Enter the regular payment amount and how many payments there are.
- 3Choose the payment frequency (monthly, yearly).
- 4Read the implied periodic and annual interest rate.
Frequently Asked Questions
How do I find the interest rate on a loan from the payments?
The calculator solves for the rate that makes the discounted payments equal the loan. For example, borrowing 100,000 repaid in 12 monthly payments of 9,000 implies about 1.5% per month, or roughly 19.6% per year — much higher than a headline '8% of the total' might suggest.
Why can't the rate be calculated with a simple formula?
The rate appears inside a power and a sum in the payment equation, so it cannot be isolated algebraically. Calculators and spreadsheets use iterative methods (like bisection or Newton's method) to home in on the answer.
How do 'no interest' instalment plans hide a rate?
If the cash price is lower than the instalment price, the difference is effectively interest. Enter the cash price as principal and the instalments as payments, and this tool reveals the real rate — often far above zero.
Can I use this to find an investment's return?
Yes. Enter the amount invested as principal and the payouts you receive as payments; the implied rate is your periodic return. For irregular cash flows, use an IRR calculator instead.