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Interest Rate Calculator

Interest Rate
— %
Total Payment
Total Interest

Interest Rate Calculator

An interest rate is the cost of borrowing money, expressed as a percentage of the principal. It directly affects how much borrowers pay and how much lenders earn over time.

Simple Interest

Simple interest is calculated only on the original principal amount and does not compound over time.

Interest = Principal × Rate × Time

Compound Interest

Compound interest is calculated on the principal plus accumulated interest, leading to faster growth.

Interest earns interest over time

Fixed Interest Rate

A fixed interest rate remains the same throughout the life of the loan, offering predictable payments.

Variable Interest Rate

A variable interest rate fluctuates based on economic conditions, inflation, or market indices.

APR (Annual Percentage Rate)

APR includes the interest rate plus additional loan-related fees, making it a more accurate comparison tool than interest rate alone.

APR reflects the true cost of borrowing

Economic Factors Affecting Interest Rates

Personal Factors That Affect Interest Rates

Real vs Nominal Interest Rate

The real interest rate accounts for inflation and shows the true purchasing power gained or lost.

Real Rate + Inflation = Nominal Rate

Frequently Asked Questions

What is an interest rate?

An interest rate is the cost charged by lenders for borrowing money, expressed as a percentage.

Is APR the same as interest rate?

No. APR includes interest plus additional fees, making it a more accurate borrowing cost.

What affects my interest rate the most?

Credit score, loan type, loan term, and current economic conditions.

What is a real interest rate?

The real interest rate accounts for inflation and reflects actual purchasing power.

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