Murabaha profit rate calculator
If a seller or bank quotes an installment and term without a clear rate, enter them here to see the real profit rate and compare offers.
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How to use it
- Enter amount financed, monthly installment and term.
- The result appears straight away and updates as you edit.
- Copy the result, or copy a link that keeps the same values to share it.
How it is calculated
Total profit = installment × months − financed. Flat rate = profit ÷ financed ÷ (months ÷ 12) × 100. APR = 12 × the monthly rate at which the installments are worth the financed amount.
Example
Inputs: Amount financed = 80,000, Monthly installment = 1,600, Term = 60 months. Result: Flat annual profit rate: 4%; Equivalent APR: 7.42%; Total profit: 16,000.00.
Limits and caveats
- Assumes equal monthly installments starting one month after funding.
- Upfront fees raise the true cost and only show here if you subtract them from the amount financed.
Questions about this tool
Which figure should I compare offers with?
Use the APR, because it accounts for the falling balance; the flat rate makes a cost look lower than it is.
How can I estimate the APR by hand?
A common shortcut is flat rate × 2n ÷ (n + 1), but it is only approximate; the calculator solves it exactly.
Does it work for store installment offers?
Yes. Enter the cash price minus any down payment as the amount financed, then the installment and term.