Annual Percentage Rate Calculator

Use this calculator to turn the total finance charges and repayment schedule into a standardized annual percentage rate. APR expresses the true yearly cost of borrowing by blending the extra charges over the principal with the length and cadence of payments.

How APR is Derived

The APR formula used here multiplies the finance charge by twice the payments per year and divides that by the amount financed times the sum of total payments plus one. This method is the standard for U.S. Truth in Lending disclosures, ensuring the annualized rate accounts for both the cost and payment rhythm.

Keeping the finance charge and principal steady while reducing the payment count usually raises the APR because the same extra cost is spread over fewer periods.

Realistic Example

Suppose you pay $360 in finance charges on a $4,800 amount financed, repaid over 24 monthly installments (12 payments annually). Feeding those numbers into the APR calculator exposes the annualized rate so you can compare offers confidently.