This interest rate calculator finds the annual rate from the interest paid, the principal, and the time period. Enter the values above to solve for the rate.
Formula (simple interest)
Rate = Interest ÷ (Principal × Time)
Example
$500 interest on $10,000 over 1 year: rate = 500 ÷ (10,000 × 1) = 5%.
Simple vs compound
This gives the simple annual rate. For accounts that compound, the effective annual rate (APY) is a little higher than the nominal rate.
Good to know
These results are estimates for educational purposes only and are not financial advice. Rates, fees, and terms vary by lender and situation — confirm figures with a licensed professional before making decisions. Last updated: August 2026.
Frequently Asked Questions
How do I calculate an interest rate?
Divide the interest paid by the product of the principal and the time in years for the simple annual rate.
What is the difference between APR and APY?
APR is the nominal annual rate; APY includes the effect of compounding, so it is slightly higher.
Is this rate before or after compounding?
It is the simple rate. Accounts that compound will have a higher effective annual yield.