It is all quite legal and here is a an actaual example from to day's newspaper, typical of most of them. They simply exploit people's ignorance of the rules of rounding:
A major finance company advertises that its lending rate is 8.4% APR and their accompanying table shows that for a loan of £10,000 over 120 months you would pay £122.05 per month,
If you calculate the true interest rate for these payments, you will find it is 8.447%. Of course in law, the company cannot be accused of telling lies, because to the first decimal place, the interest rate they are quoting is correct.
2007-07-29
12:31:10
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6 answers
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asked by
Anonymous
in
Personal Finance