Interest Rate Calculator
Find the effective interest rate knowing the amount, monthly payment and term.
Tip: In Albania, the Bank of Albania requires banks to publish the EAR (Effective Annual Rate) — always compare this value, not the nominal rate.
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About this digital tool
The interest rate calculator finds the rate hidden behind an offer when the bank gives you only the amount, the monthly payment and the term. Enter the borrowed amount, the monthly payment and the number of months, and the tool finds the nominal annual rate and the effective rate (EAR/APR), taking compounding into account. The calculation solves the annuity equation for the rate, which requires a numerical method.
It is useful when a seller, shop or bank advertises a low payment without showing the rate, or when you want to compare two offers with different terms. Be careful: arrangement fees or insurance can raise the real cost above the rate shown here. The result is an estimate and depends on the accuracy of the data.
How to use
- Enter the total amount borrowed
- Enter the monthly (or periodic) payment
- Enter the total term in months
- Choose the type: nominal or effective
- Get the calculated rate
Frequently asked questions
What is the difference between the nominal and the effective rate?
The nominal rate is the stated interest without including compounding. The effective rate (EAR) includes the effect of compounding (e.g. monthly) and is always slightly higher than the nominal.
What is APR?
APR (Annual Percentage Rate) is the annual rate that includes interest plus mandatory fees (disbursement fee, insurance, etc.). It is the legal comparison standard in the EU and Albania.
How does the compounding frequency affect it?
The more often interest is compounded (daily > monthly > quarterly > yearly), the higher the effective rate becomes. E.g., 12% nominal with monthly compounding = 12.68% effective.
How do I find the interest rate if I only know the payment?
Enter the amount, the monthly payment and the term. The tool solves the reverse calculation and gives you the implied annual rate.