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Calculators » Finance » Periodic Interest Rate

Our online tools will provide quick answers to your calculation and conversion needs. On this page, you can calculate period interest rate per payment, the interest rate charged for a specific period of time given the annual interest rate, number of payments per year and compounding period.

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The periodic interest rate **r** is calculated using the following formula:

r = (1 + i/m)^{m/n} - 1

Where,

i = nominal annual rate

n = number of payments per year i.e., 12 for monthly payment, 1 for yearly payment and so on.

m = number of compounding periods per year

The period interest rate per payment is integral to the calculation of annuity instruments including loans and investments.

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