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Interest Rate Tool

Free APR Calculator

Calculate the annual percentage rate on loans, credit cards, and savings. Convert APR to APY, find the true cost of borrowing with fees included, and compare rates across 8 compounding frequencies.

4 Calculation Modes
Instant Results
100% Free
%
APY (Annual Percentage Yield)
12.6825%

Formula: APY = (1 + APR/12)^12 − 1

APY at All Compounding Frequencies

CompoundingAPYDifference
Annually (1×)12.0000%+0.0000%
Semi-annually (2×)12.3600%+0.3600%
Quarterly (4×)12.5509%+0.5509%
Monthly (12×)12.6825%+0.6825%
Biweekly (26×)12.7186%+0.7186%
Weekly (52×)12.7341%+0.7341%
Daily (365×)12.7475%+0.7475%
Continuous12.7497%+0.7497%

What Is APR (Annual Percentage Rate)?

APR, or Annual Percentage Rate, is the standardized measure of the cost of borrowing money or the return on an investment over one year. It is expressed as a percentage and represents the nominal yearly rate before the effects of compounding are taken into account. Lenders in the United States are required by the Truth in Lending Act (TILA) to disclose the APR on consumer loans, making it easier for borrowers to compare offers from different financial institutions.

For borrowers, APR includes not only the base interest rate but also mandatory fees such as origination charges, discount points, and closing costs. This makes APR a more comprehensive measure of borrowing cost than the interest rate alone. For savers and investors, APR is the quoted nominal rate before compounding, which is why converting APR to APY is essential for comparing true returns.

APR vs. APY: Understanding the Difference

The key distinction between APR and APY lies in compounding. APR is the simple, nominal rate that does not account for how often interest is calculated and added to the balance. APY (Annual Percentage Yield) is the effective rate that reflects the actual return or cost after compounding over a full year.

When interest compounds more frequently than once per year, APY will always be higher than APR. For example, a savings account advertising 5.00% APR with daily compounding actually yields 5.13% APY. The more frequently interest compounds, the larger the gap between APR and APY. This is why banks often advertise APY on savings accounts (to make returns look higher) and APR on loans (to make costs look lower).

How to Use This APR Calculator

  1. 1

    Choose a Calculation Mode

    Select from four modes: APR → APY converts a nominal rate to an effective yield. APY → APR reverses the conversion. Loan APR calculates the true annual cost of a loan including fees. Credit Card APR shows payoff time and total interest on a revolving balance.

  2. 2

    Enter Your Values

    Type the rate, loan amount, payment, or balance depending on the mode. For APR/APY conversions, select the compounding frequency. For loans, include any upfront fees to see the true APR.

  3. 3

    Review Results Instantly

    Results update in real time as you type. For APR/APY conversions, a comparison table shows the result at every compounding frequency so you can see the full picture at a glance.

APR Formulas Used in This Calculator

The standard formula for converting APR to APY with periodic compounding is:

APY = (1 + APR / n)n − 1

Where n is the number of compounding periods per year. For continuous compounding, the formula becomes:

APY = eAPR − 1

To reverse the conversion (APY to APR), the formula is:

APR = n × [(1 + APY)1/n − 1]

For loan APR calculation, the calculator uses the Newton-Raphson method to solve for the periodic rate in the present value of an annuity equation, adjusting the principal for upfront fees to reflect the true cost of borrowing.

How Compounding Frequency Affects APR

The compounding frequency determines how often earned interest is added back to the principal, where it begins earning interest itself. A 10% APR compounded annually yields exactly 10% APY. The same 10% APR compounded monthly yields 10.47% APY, and compounded daily it reaches 10.52% APY. With continuous compounding, the theoretical maximum is 10.52% APY.

For savings accounts and certificates of deposit, daily compounding is most common in the United States. Credit cards typically compound monthly. Mortgage loans in the US use monthly compounding, while Canadian mortgages compound semi-annually. Understanding these differences is critical when comparing financial products across institutions and countries.

Why Use Our APR Calculator?

Two-Way Conversion

Convert APR to APY or APY to APR with any compounding frequency, including continuous compounding.

Loan APR with Fees

Calculate the true APR on mortgages and personal loans by including origination fees and closing costs.

Credit Card Analysis

See how long it takes to pay off a credit card balance and how much total interest you will pay.

Comparison Tables

Instantly compare APR or APY across 8 compounding frequencies in a single table.

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Frequently Asked Questions

What is APR?

APR (Annual Percentage Rate) is the yearly interest rate charged on borrowed money or earned on an investment, expressed as a percentage. For loans, APR includes the base interest rate plus mandatory fees, giving borrowers a standardized way to compare costs across lenders. For savings and investments, APR is the nominal rate before compounding is applied.

What is the difference between APR and APY?

APR is the nominal annual rate without accounting for compounding. APY (Annual Percentage Yield) is the effective annual rate that includes the effect of compounding. When interest compounds more than once per year, APY is always higher than APR. For example, a 12% APR compounded monthly produces an APY of approximately 12.68%.

How do I convert APR to APY?

Use the formula APY = (1 + APR/n)^n − 1, where n is the number of compounding periods per year. For continuous compounding, use APY = e^APR − 1. Our calculator handles both formulas automatically—just enter the APR and select the compounding frequency.

How do I convert APY to APR?

Use the formula APR = n × [(1 + APY)^(1/n) − 1], where n is the number of compounding periods per year. For continuous compounding, use APR = ln(1 + APY). This reverse conversion is useful when a bank quotes APY and you need the nominal rate.

What is a good APR for a credit card?

As of 2025, the average credit card APR in the United States is around 20–24%. A "good" APR is typically below 15%, while promotional or introductory offers may be 0% for a limited period. The best strategy is to pay your balance in full each month to avoid interest charges entirely.

How is loan APR different from the interest rate?

A loan's interest rate is the cost of borrowing the principal amount only. The APR includes the interest rate plus additional mandatory fees such as origination fees, closing costs, and discount points, spread over the loan term. APR gives a more accurate picture of the total annual cost of borrowing.

Is this APR calculator free?

Yes, this APR calculator is completely free with no registration required. Convert between APR and APY, calculate loan APR with fees, and analyze credit card interest costs at no charge.

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