Determining Annual Percentage Rate (APR) With a Hand Calculator

December 7, 2004, Reviewed January 7, 2008, August 25, 2010, February 5, 2011

The APR on a fixed-rate mortgage can be calculated on an inexpensive financial calculator quite easily.

Assume the loan amount is $100,000, term 360 months, rate 6%, and APR fees $2,000.

1. Enter: -100000 in PV, 360 in N, 6 in I/Yr and 0 in FV.

2. Solve for PMT = 604.4236.

3. Round PMT up to 604.43, enter this number in PMT.

4. Enter loan amount less APR fees in PV as -98000.

5. Solve for I/Yr = 6.266. This is the APR.

It is even easier using one of the three APR calculators on this site, which allow you to calculate the APR on adjustable rate mortgages as well as on fixed-rate mortgages.


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