2006-09-03 13:49:35 · 3 answers · asked by Henry O 1 in Business & Finance ➔ Personal Finance
Assume you have a loan with an annual percentage rate (APR) of 12%. This means that, every year, for each $100 of loan you have, you will be charged $12.
At the end of a year, you would owe $112 on a $100 loan
$124 on a $200 loan
$136 on a $300 loan
and so on.
2006-09-03 13:54:34 · answer #1 · answered by Anonymous · 0⤊ 0⤋
APR is basically the interest rate the bank will be making on your loan. Usually they apply it monthly, or however it is you make your payments.
$100 loan with 12% APR, acrued monthly. making $5 payments monthly as well
$100
+ $1 (interest)
- $5 (payment)
$96 -amt owed after 1 mos.
When figuring out the next mos. interest rate you would be paying $0.96, since you already paid off the 4 dollars of the principle.
2006-09-03 14:03:08 · answer #2 · answered by hfmgr06 4 · 0⤊ 0⤋
that is the total yearly cost of a loan! ie 1.5 percent monthly rate is 18 percent annual percentage rate!
2006-09-03 13:55:49 · answer #3 · answered by Pobept 6 · 0⤊ 0⤋
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RE :How does Annual Percentage Rate work?
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2017-04-04 16:36:34 · answer #4 · answered by Gardie 6 · 0⤊ 0⤋