We propose an interior permanent magnet syhchronous motor (IPMSM) with arc-shape ferrite permanent magnets (PMs) as a substitute for the rare-earth permanent magnet, and determine its optimal design through parametric study. First, we use 2D finite element analysis to analyze 4-poles and 6-slots initial model according to performance requirements and design parameters. The current angle of the maximum average torque considered in the analysis is different compared with the current angle of the minimum torque ripple. Thus, the parametric study for optimal rotor design is performed by varying the thickness and the offset radius of the PMs according to current angle. In particular, a narrow bridge is required in conventional IPMSM for reducing flux leakage; however, the increase in cogging torque in the analysis model saturates the narrow bridge (large offset radius). Therefore, we suggest an appropriate shape considering limiting conditions such as DC link voltage, average torque, torque ripple, and cogging torque taking into account performance requirements.