I’m trying to calculate the APR for a loan that includes an origination fee and am struggling to match the APR provided by an online calculator.

Here are the details of the loan:

• Loan Amount (Principal): $100,000
• Origination Fee: $8,000 (deducted from the loan amount, so the amount received is $92,000)
• Nominal Annual Interest Rate: 23%
• Loan Term: 12 months
• Monthly Payment: $9,407.63

I need to compute the APR which accounts for both the interest rate and the origination fee. I used Excel’s RATE function to find the effective monthly interest rate, but the APR I calculated (47.60%) does not match the APR of 38.28% shown on the online calculator NerdWallet.

Here’s what I’ve tried:

1. Calculated the effective monthly rate using:

   =RATE(12, -9407.63, 92000, 0)
   

2. Converted this rate to APR using:

   =( (1 + [Monthly Rate])^12 - 1 ) * 100