2006-10-26 09:29:15 · 3 answers · asked by Tan 1 in Business & Finance ➔ Credit
Take the amount of interest you pay divided by the total amount of the loan.
ex.
$100,000 loan....if you pay $10,000 in interest every year you have an APR of 10%
2006-10-26 09:37:39 · answer #1 · answered by tightlies 3 · 0⤊ 0⤋
The correct method of calculating interest is as follows:
The unpaid balance multiplied by the apr ..... then divided by either 360 or 365 ..... then multipled by the number of days in the billing cycle.
The 360 or 365 is the number of days in a year. The FRB, FDIC etc allow either the use of 360 or 365 in that calculation.
This is the method to find out the amount of interest charged on all debts that are interest bearing - meaning the balance does not already include the interst. Those debts are called pre-computed.
2006-10-29 05:14:15 · answer #2 · answered by chey_one 3 · 0⤊ 0⤋
There's a lot of "smoke and mirror" stuff when it comes to interest percentage. One company does it one way, another another way, and yet another another way altogether.
Which is WHY they're all now required to state the interest as APR.
How do YOU calculate it? It's better to just read the number that THEY calculate. Their number is the important one.
2006-10-26 09:40:34 · answer #3 · answered by Anonymous · 0⤊ 0⤋