# how is auto loan apr calculated The annual percentage rate calculated on your car loan is found bytaking the rate per period multiplied by the number of payments you will make in a given year. Annual percentage rate is one way to determine the actual expense of financing in a given year,but it is not always the most accurate.

• ### How does Apr work on a car loan?

• How APR Works. Lenders charge interest on a car loan each month. The amount of interest is obtained by multiplying the monthly interest rate by the loan balance.

• ### How do I calculate the APR on a loan?

• =RATE (number of months in loan term, estimated monthly payment, value of loan minus fees)*12 Using the monthly payment you calculated (-\$239.41), here鈥檚 what you鈥檇 enter into the cell for this loan example. =RATE (60,-239.41,12500)*12 Entering the formula above would calculate your estimated APR at approximately 5.6%.

• ### How do I calculate my car loan interest rate?

• Now divide this number by your loan amount. Divide this number by the number of days in your loan term and multiply the result by 365 to find your annual rate. Finally, multiply by 100 to get the annual rate as a percentage. Example of a Calculation Let’s say you’re paying \$20,000 for the car and you’re putting down \$2,000.

• ### What is the APR on a \$5000 car loan?

• You have a \$5,000 car loan with an interest rate of 2% per month over a 48 month period. APR = 12 months (.02 per month) = 2.4% APR APY = ( 1 + .02 per month ) multiplied by 12 months -1 = 2.68% APY