The Annual Percentage Rate (APR) is a crucial metric for understanding the true cost of borrowing money on a credit card. It represents the yearly interest rate you'll pay on any outstanding balance that isn't paid in full by the due date. Unlike a simple interest rate, APR often includes fees, but for credit card calculations, it primarily focuses on the interest charged over a year.
When you carry a balance on your credit card, interest accrues daily. The APR dictates how much that interest will be. This calculator helps you visualize the impact of carrying a balance over a short period (like a billing cycle) based on your card's APR.
How the Calculation Works:
Daily Periodic Rate: The APR is divided by 365 (or 360, depending on the card issuer's convention, but we use 365 here for a standard calculation) to determine the daily interest rate.
Interest Accrued During Billing Cycle: The daily interest rate is then applied to the balance carried over the number of days in your billing cycle.
Interest Accrued During Grace Period: If you pay your statement balance in full by the due date, you typically won't be charged interest on new purchases during the grace period. However, if you carry a balance from a previous cycle, or don't pay in full, interest will still accrue on your purchases from the transaction date. This calculator estimates interest on the purchase amount assuming it's carried through the specified grace period and billing cycle.
Formula Used:
1. Daily Periodic Rate = Annual Interest Rate (%) / 100 / 365
2. Interest Charged = Purchase Amount * Daily Periodic Rate * Number of Days (Payment Period + Billing Cycle)
This calculator provides an estimate. Actual interest charges may vary based on your card issuer's specific calculations (e.g., using a 360-day year, specific grace period rules, and how they apply interest to different types of balances). Always refer to your credit card agreement for precise details.
Why Use This Calculator?
Estimate Interest Costs: Understand how much interest you might pay on a purchase if you can't pay it off immediately.
Compare Cards: See how different APRs on various cards would affect the cost of carrying a balance.
Budgeting: Factor potential interest charges into your personal budget.
Informed Decisions: Make better decisions about using credit and managing debt.
function calculateAPR() {
var purchaseAmount = parseFloat(document.getElementById("purchaseAmount").value);
var interestRatePerYear = parseFloat(document.getElementById("interestRatePerYear").value);
var paymentPeriodDays = parseFloat(document.getElementById("paymentPeriodDays").value);
var billingCycleDays = parseFloat(document.getElementById("billingCycleDays").value);
var resultDiv = document.getElementById("result");
resultDiv.innerHTML = ""; // Clear previous results
// Input validation
if (isNaN(purchaseAmount) || purchaseAmount <= 0) {
resultDiv.innerHTML = "Please enter a valid purchase amount.";
return;
}
if (isNaN(interestRatePerYear) || interestRatePerYear < 0) {
resultDiv.innerHTML = "Please enter a valid annual interest rate.";
return;
}
if (isNaN(paymentPeriodDays) || paymentPeriodDays < 0) {
resultDiv.innerHTML = "Please enter a valid number of days for the payment period.";
return;
}
if (isNaN(billingCycleDays) || billingCycleDays <= 0) {
resultDiv.innerHTML = "Please enter a valid billing cycle length.";
return;
}
// Calculations
var dailyPeriodicRate = interestRatePerYear / 100 / 365;
var totalDaysInterestApplies = paymentPeriodDays + billingCycleDays; // Approximate days interest accrues before next statement due date
var estimatedInterestCharged = purchaseAmount * dailyPeriodicRate * totalDaysInterestApplies;
var formattedInterest = estimatedInterestCharged.toFixed(2);
var formattedPurchase = purchaseAmount.toFixed(2);
resultDiv.innerHTML = "$" + formattedInterest + " Estimated interest on $" + formattedPurchase + " after approximately " + totalDaysInterestApplies + " days";
}