💰 APR Calculator
The Advanced APR Calculator finds the effective Annual Percentage Rate (APR) for a loan (fixed mortgage, car loan, etc.), allowing you to specify interest compounding and payment frequencies. Input loan amount, interest rate, number of payments, and financing fees to find the APR for the loan. You can also create a custom amortization schedule for loan principal + interest payments.
What is APR?
APR is the annual rate that is charged for a loan, representing the actual yearly cost of a loan over the term of the loan. This includes financing charges and any fees or additional costs associated with the loan such as closing costs or points.
If you take a mortgage for $100,000 at an interest rate i with no additional fees then i is likely your APR. However, if you have additional fees rolled into the loan, your APR will be higher than the stated interest rate i.
APR Examples
Suppose you lend me $20 for a year at 10% interest. At the end of the year I will owe you $22. Now, 2/20 = 0.10, so the APR is 10%. This is a one-year loan at 10% interest and 10% APR.
Now suppose you lend me $20 for a year at 10% interest, but also charge a $3 fee. At the end of the year I owe you $25. Now, 5/20 = 0.25, so the APR is 25%.