Find the interest rate on a loan given the loan amount, loan term, and monthly payment. Uses binary search for high-precision results.
The interest rate is the amount charged by lenders to borrowers for the use of money, expressed as a percentage of the principal. An 8% rate on $100 means $108 is owed after one year. Interest rates are usually expressed annually but can also be expressed monthly or daily.
Interest rates apply in mortgages, credit cards, business loans, retirement growth, and much more. Generally, borrowers want lower rates while lenders seek higher rates for larger profits.
This calculator uses a binary search algorithm to solve for the interest rate that produces the given monthly payment for the loan amount and term provided. The result is expressed as an Annual Percentage Rate (APR). The amortization graph shows how principal and interest portions shift over the loan term — early payments are mostly interest, while later payments are mostly principal.
APR: (1 + monthly rate)^12 − 1