Interest Rate Calculator
Loan Details
Calculate the interest rate for a loan based on the amount, payment, and term.
Results
The calculated interest rate and payment details.
Enter your loan details and click "Calculate Interest Rate" to see the results.
How It Works
Understanding how the loan interest rate calculator works.
The Loan Interest Rate Calculator uses the Newton-Raphson method, an advanced numerical technique, to determine the interest rate that would result in the specified payment amount for your loan.
The Calculation Process:
- The calculator takes your loan amount, payment amount, and term as inputs.
- It uses an iterative process to find the interest rate that makes the present value of all payments equal to the loan amount.
- The calculation accounts for your selected compounding and payment frequencies.
- Once the interest rate is found, it calculates the amortization schedule showing how each payment is split between principal and interest.
Important Notes:
- The payment amount must be sufficient to repay the loan within the specified term.
- The calculator assumes regular payments of equal amounts.
- For very long terms or unusual payment structures, the calculated interest rate may be an approximation.
- The APR (Annual Percentage Rate) shown is the effective annual interest rate based on the calculated rate and compounding frequency.