How this calculator works
This applies the general Canadian federal-bank formula for closed-end loans with charges. Supply eligible borrowing cost, average principal and term after applying sections 47 and 48. Special cases are excluded. Section 32 uses the contract rate for interest-only borrowing costs.
Formula
APR = C/(T × P), displayed as a percentage. C is eligible borrowing cost, T the term in years and P average principal outstanding before scheduled payments, excluding interest and borrowing costs.
Worked example
Eligible costs of $650, average principal of $5,000 and a one-year term produce an APR of 13.000000%. Costs of $120 on average principal of $2,400 over half a year give 10.000000%.
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Frequently asked questions
Can I substitute the original loan amount?
No. The denominator uses average outstanding principal, not initial principal.
Does this calculate US APR?
No. US closed-end APR generally uses a discounted cash-flow method. This Canadian quotient cannot be relabelled US APR.
Is statutory rounding applied?
Results display six decimal places. Optional statutory rounding to an eighth of a percentage point is not applied.