Cash-flow borrowing rate: Finding the Periodic Rate Hidden in Loan Cash Flows
A borrowing-rate calculation matches the money received with repayments at equal intervals. Include fees that reduce the initial proceeds to see their effect on the periodic cost.
Use the Cash-flow borrowing rate Calculator to enter your own figures and compare the result with the worked example below.
Cash-flow borrowing rate formula
Solve 0 = Net proceeds − Σ(payment_k ÷ (1+i)^k)
Worked example
| Item | Example value |
|---|---|
| Cash flows at equal intervals (proceeds positive then repayments negative) | 1000,-550,-550 |
| IRR per cash-flow period | 6.59646% |
These are illustrative inputs, not current prices, rates or recommended targets. Where a currency is shown, keep all comparable money amounts in the same currency; conversion examples identify the two sides separately.
How to interpret the result
The result is per cash-flow period. It is not automatically an annual APR, and irregular payment dates need a dated model.
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Method and further reading
The example follows the FinMathly calculator method. For broader background, see CFPB: Building a budget. The background resource may use jurisdiction-specific terms; it does not replace the assumptions of this calculator.
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