Interest Calculation

sammyd22

Does anybody know the formula for calculating apr into a montly rate?

Cant seem to find this in any of my books.

Cheers.

For example: APR of 18% broken into a monthly rate?

PGM

divide it by 12

sammyd22

lol. I wish.

Maybe i didnt explain it too well.

Its calculating the annual to compund monthly rate.

I have an annual rate of 18%

Monthly compound rate = 1.3888 (Not quite sure how i get to this anser though)?

Any idea on the calculation?

crispy

Hello,

To calculate monthly:

12th root of 1.18 = 1.013888

1.013888 - 1 = 0.013888

= 1.3888 %

sammyd22

Great stuff.

crispy

Hi,

This is probably obvious but you can check the calcultation the other way around eg.

1.01388^12 - 1 = 18 %

Monsoon

Please could any of the respondents who understand this stuff have a look at my similar query here?

http://forums.aat.org.uk/showthread.php?t=30548


Thank you!

PGM

sammyd22 wrote: »

Its calculating the annual to compund monthly rate.

Ah right its the compounding you needed to work out then.

sammyd22

thanks all