# NIR and APR

Do you need a NIR and APR calculator? Use ours to obtain the equivalence between both interest rates automatically.

To do this, you only have to fill in one of the two fields and select the frequency with which the interest payment occurs, as the latter influences the conversion from NIR to APR and vice versa.

It is likely that if you are going to ask for a deposit, a loan or a mortgage, you will be told about the APR and the NIR, but what are the differences? To find out, let's introduce a little about each of the two interest rates.

## What is the APR

The APR is the Annual Percentage Rate of Charge, and is an indicator that tells us how well the company is performing. (whether positive or negative) that the owner of the money receives for temporarily assigning (or receiving) it.

For more information about the Annual Percentage Ratehere you can see how calculating the APR and understand a little better how it applies to a particular financial product.

## What is the TIN

When we talk about TIN we refer to Nominal Interest Rate and according to the Bank of Spain's definition, this interest rate is used when the period of time foreseen for calculating and settling interest coincides with the form of expression of the interest rate.

## Difference between NIR and APR

At this point, it is likely that we are still unclear about the differences between the Annual Percentage Rate and the Nominal Interest Rateright? Let's try to remedy that.

The TIN:

• Indicates the % we will receive or will be charged for transferring or receiving money.
• Interest is charged on each receipt that may have daily, weekly, monthly, quarterly, quarterly or annual accruals. This point is very important since a nominal annual interest rate of 6% is equivalent to an NIR of 0.5% per month.
• Does not take into account expenses or commissions associated with the transaction

The APR:

• Reveals the effective cost of contracting a product financial.
• It is accrued annually.
• It takes into account some expenses and transaction fees such as origination and cancellation fees. However, notary fees are not taken into account in the calculation of the Annual Percentage Rate.

For the above reasons, the APR is often used to compare different financial products since by law, banks are obliged to publish the APR in their offers.

The APR is also a somewhat more realistic indicator than the NIR. by taking into account some expenses and commissions of the financial product, although not all of them are included and you should always read the fine print before contracting them.

Are you clear about the difference between NIR and APR? We hope that this summary has helped you to clarify your doubts when it comes to taking out a loan, a deposit or a mortgage.

## From TIN to APR in Excel

If you want to create your own TIN to APR converterIn Excel you can do it with the following function:

=CASH(TIN;Settlement periods)

As you can see, the function has two arguments. In the first one we must write the Nominal Interest Rate and in the second argument the settlement periods which are shown in the following table:

TypePeriods
Annual1
Semiannual2
Quarterly3
Quarterly4
Bimonthly6
Monthly12

For example, if you want to calculating the APR equivalent of an Annual Percentage Rate of Interest of 5% with quarterly accrual, then you have to write the formula like this in Excel:

=INT.EFFECTIVE(5%;4)

If the result does not have enough decimal places, go to the cell format and change the value to the one you need.

## Convert APR to NIR in Excel

We can also create another simulator for convert APR to NIR in Excel. For this we will use this other function:

=RATE.NOMINAL(APR;Settlement Periods)

In this case, the first argument will be the Annual Equivalent Rate and the second will again be the interest liquidation periods that coincide with those we have seen in the table of the previous point.

To implement this formula, we will convert a 5% APR to a Nominal Interest Rate with monthly accrual periods:

=NOMINAL.RATE(5%;12)

## Cómo funciona la calculadora TIN - TAE

Now that you know how to convert from NIR to APR and convert from APR to NIR using Excel, you can intuit how our calculator works.

What we have done is to run the calculation from one interest rate to another at once taking into account the interest rate and the interest accrual period.