How to Use Our Interest Rate Calculator
This tool finds the annual interest rate when you provide the other details of a loan or investment. To get started, simply enter the terms you already know.
Number of Periods (N): The total number of payments or compounding periods. For example, a 30-year mortgage paid monthly has 360 periods (30 years x 12 months).
Present Value (PV): The value of the money today. For a loan, this is the total amount you borrowed. For an investment, it’s your starting balance.
Payment (PMT): The fixed amount paid each period. This could be your monthly loan payment or a regular contribution to an investment. If there are no regular payments, enter $0.
Future Value (FV): The value of the money at the end of the term. For most loans, this is $0 because the goal is to pay it off completely. For an investment, this is the ending balance.
A Critical Note on Cash Flow Signs (+/-)
To get a correct result, you must tell the calculator the direction the money is moving. This is the #1 reason for errors.
Money You Receive (Inflow): Enter as a positive number. (e.g., The loan amount you get from a bank).
Money You Pay Out (Outflow): Enter as a negative number. (e.g., Your monthly loan payment or the initial amount you invest).
Concrete Examples:
For a Loan: You borrow $25,000 (PV = 25000) and make monthly payments of $500 (PMT = -500).
For an Investment: You invest an initial $10,000 (PV = -10000) and the investment grows to $50,000 (FV = 50000).
Understanding Your Results
The percentage shown is the nominal Annual Interest Rate required for the numbers you entered to be true. This single number has different names and implications depending on your scenario.
What This Rate Tells You
Frequently Asked Questions
Why did my calculator give me an error?
An error almost always comes down to one of two issues:
Incorrect Cash Flow Signs: You must have at least one positive value (inflow) and at least one negative value (outflow). You cannot have all positive or all negative numbers. For example, you can’t borrow money (PV > 0) and also receive payments (PMT > 0).
Impossible Scenario: The numbers you entered are mathematically impossible. For instance, if you start with $5,000, make no payments, and expect it to be worth $4,000 in 5 years, the only way that can happen is with a negative interest rate, which the calculator may show as an error.
What’s the difference between an interest rate and APR?
“Interest Rate” (or the “note rate”) is the base percentage used to calculate the interest you pay on the loan principal. Annual Percentage Rate (APR) is a broader measure of the cost of borrowing. It includes the interest rate plus other lender fees, such as origination fees or closing costs, expressed as an annual percentage. Because APR includes fees, it is a more accurate representation of the total cost of a loan and is the better number to use when comparing offers.
How can I use this to compare two loan offers?
This is one of the most powerful uses of the calculator. Imagine you have two car loan offers for a $30,000 car:
Offer A: 60 monthly payments of $580.
Offer B: 72 monthly payments of $505, but they add a $500 “origination fee” to the loan amount.
To compare, you run two calculations:
For Offer A:
N = 60
PV = 30000
PMT = -580
FV = 0
Result (APR) = 6.03%
For Offer B:
Despite having a lower monthly payment, Offer B is significantly more expensive because of the longer term and the added fee.
My investment return changes every year. What does this “annual rate” mean?
This is a great question. The rate you calculate for an investment is the Compound Annual Growth Rate (CAGR). It is not the actual return for any given year, but rather a smoothed-out average that represents the overall growth of your investment over the entire period. For example, an investment might return +20% one year and -10% the next, but the CAGR over those two years would be 3.9%. This makes it the perfect metric for comparing investments with volatile returns.
What is a “good” interest rate in 2025?
A “good” rate is highly dependent on the current economic environment and your personal creditworthiness.
For Loans: The best way to know what a good rate is is to check the current national averages. The Federal Reserve publishes data on average rates for mortgages, auto loans, and personal loans. A “good” rate for you would be at or below that average, given a strong credit score.
For Investments: There’s no such thing as a guaranteed “good” rate of return. However, a common benchmark is the historical average of the S&P 500, which is around 10% annually over the long term, though this is never guaranteed.
Take the Next Step in Your Financial Analysis
Now that you’ve found your interest rate, use it to get a clearer picture of your finances.
