Interest Rate Calculator Find the interest rate for loans, savings, or investments — with APR/APY conversion, compounding...
Interest Rate Calculator
Find the interest rate for loans, savings, or investments — with APR/APY conversion, compounding, and fee adjustments.
APR (Annual Percentage Rate)** = Nominal annual rate, *does not* include compounding.
APY (Annual Percentage Yield)** = Effective annual rate, *includes* compounding.
Formula**:
$$APY = \left(1 + \frac{APR}{n}\right)^n - 1$$
Where $n$ = compounding periods/year.
Example**:
- 6% APR compounded monthly: $$(1 + 0.06/12)^{12} - 1 = 6.17\%\, APY$$
- 5% APR compounded daily: $$(1 + 0.05/365)^{365} - 1 = 5.13\%\, APY$$
✅ Pro Tip**: For savings, compare APYs. For loans, compare APRs (but see *effective APR* below for true cost).
⚠️ Watch for these misleading practices:
- Teaser Rates** — “0.9% APR!” for 6 months → jumps to 18%
- Precomputed Interest** — Pay full interest even if paid early (Rule of 78s)
- Points & Fees** — 1 point = 1% fee → adds ~0.12% to effective rate
- “No Interest” Financing** — deferred interest: if not paid in full by term, all interest back-charged
✅ How to Compare Fairly**:
- Use **effective APR** = total finance charge ÷ loan amount × (12 / term in months)
- For mortgages: use **APR on Truth-in-Lending disclosure** (includes most fees)
- Never trust advertised rates — always ask for full amortization schedule.
| Product | Nominal | Effective APR | APY |
|---|---|---|---|
| 30-Yr Mortgage | 6.80% | 6.95% | 6.99% |
| Auto Loan | 7.20% | 7.80% | 7.44% |
| HYSA | 4.41% | — | 4.50% |
| Credit Card | 20.99% | 20.99% | 23.14% |
📉 Rule of 72**:
- Estimate doubling time: 72 ÷ APY = years to double
- 7% return → 72/7 ≈ **10.3 years**
- 4.5% APY → **16 years**
➡️ Loan Rate
“I’m paying $500/mo on a $25K loan for 5 years — what’s my rate?”
➡️ Savings Yield
“I want $15K in 7 years starting with $10K — what return do I need?”
➡️ APR → APY
Convert quoted APR to true yield (savings) or cost (loans).
➡️ Effective Rate
Add fees to nominal rate for apples-to-apples lender comparison.
Note: Uses Newton-Raphson for loan rate solve, exact compounding math for APR/APY.