So, How do you Calculate the True Annual Percentage
Rate on a Payday Loan?
You will need to know three things before you start, as follows:
First, what is the amount of credit the borrower will receive (Amount Financed) = i.e., $350.00.
Second, what is the dollar amount the credit will cost (Finance Charge) = i.e., $50.00.
Third, what is the term of the loan = i.e., 14-days.
Step 1 – Divide the total Finance Charge ($50.00) by the Amount Financed - the amount the
borrower will receive ($350.00) = 0.142857.
Step 2 – Multiply the answer (0.142857) by the number of days in the year (365) = 52.142857.
Step 3 – Divide the answer (52.142857) by term of the loan (14-days) = 3.724489.
Step 4 – Move the decimal point to the right two places and add a percent sign = 3.724489
becomes 372.45% Annual Percentage Rate (see note below).
What if you Know the Cost per $100.00 and Want to
Convert That to a True Annual Percentage Rate?
You will need to know three things before you start, as follows:
First, what is the amount of credit the borrower will receive (amount Financed) = i.e., $500.00.
Second, what is the cost for the loan per hundred = i.e., $20.00 or 20%.
Third, what is the term of the loan = i.e., 14-days.
Step 1 – Divide the Amount Financed - amount the borrower will receive ($500.00) by 100 = 5.
Step 2 – Multiply the answer (5) by the amount per hundred ($20.00 or 20%) to find the total
Finance Charge = $100.00.
Step 3 – Divide the total Finance Charge ($100.00) by the amount the borrower will receive
($500.00) = 0.2.
Step 4 – Multiply the answer (0.2) by the number of days in the year (365) = 73.
Step 5 – Divide the answer (73) by term of the loan (14-days) = 5.214285.
Step 6 – Move the decimal point to the right two places and add a percent sign = 5.214285
becomes 521.43% Annual Percentage Rate (see note below).
Note: Annual Percentage Rate always has no more than two places to the right of the decimal point.
http://www.stoppaydaypredators.org/pdfs2/aaapl_howtocal.pdf
maybe, just maybe you might want to listen up once in a while
the only thing idiotic was your response