The math is excluding compounding. A simplified look (payment due at end of 15 years) is around 6.3% annually https://www.wolframalpha.com/input/?i=2.5%5E(1%2F1

The math is excluding compounding. A simplified look (payment due at end of 15 years) is around 6.3% annually https://www.wolframalpha.com/input/?i=2.5%5E(1%2F15)&assumption=%22%5E%22+-%3E+%22Real%22 https://www.wolframalpha.com/input/?i=2.5%5E(1%2F15)&assumpt... The math including payments is a bit more complex and will depend on how much you are paying during the loan term. I.e. if you paid 2.4x on day one and 0.1x the final day looks a lot different from 0.1x on day one and 2.4x the last day due to the time value of money.