How do you work out the interest rate?

Jo4

How do you work out the interest rate you are being charged? What are the interest rates on the following two scenarios if the amount borrowed is £3,360 and the total repaid is £3,648 or £3,744?

CLAPTON

it depends upon how long the loan is for and what your periodic payments are and their frequency.

Jo4

CLAPTON wrote: »

it depends upon how long the loan is for and what your periodic payments are and their frequency.

One is for 2yrs paying approximately £152 a month, total repaid £3,648. The second os for 3yrs paying approximately £104 a month, total repaid £3,744.

I hope that answers your question.

marshallka

Jo4 wrote: »

One is for 2yrs paying approximately £152 a month, total repaid £3,648. The second os for 3yrs paying approximately £104 a month, total repaid £3,744.

I hope that answers your question.

One is 8% I think and that is £3360 over 2 years and repayments of £152 and the other is £3360 over 3 years and repayments of £104 being 7.2%

http://www.moneymadeclear.fsa.gov.uk/tools.aspx?Tool=loan_calculator

okay_now

Jo4 wrote: »

One is for 2yrs paying approximately £152 a month, total repaid £3,648. The second os for 3yrs paying approximately £104 a month, total repaid £3,744.

I hope that answers your question.

As 'flat rates', the loans are 4.3% and 3.8% respectively - to reach an 'APR' you would approximately double these figures.

Either way I wouldn't worry about the percentage, the actual cash you have to repay is very low, I doubt you would find much cheaper.

Jo4

okay_now wrote: »

As 'flat rates', the loans are 4.3% and 3.8% respectively - to reach an 'APR' you would approximately double these figures.

Either way I wouldn't worry about the percentage, the actual cash you have to repay is very low, I doubt you would find much cheaper.

How did you work this out?

okay_now

Hi,

Here is how to accurately (and easily) calculate interest rates;

Amount borrowed £3360
x 4.3% (interest)
= £144.48
x 2 (number of repayment years)
= £288.96

Add the interest and the original amount together = £3648.96

And to do the same again for your 3 year example;

£3360
x 3.8%
= £127.68
x 3
= £383.04

Total £3743.04

Does that make sense?

Jo4

okay_now wrote: »

Hi,

Here is how to accurately (and easily) calculate interest rates;

Amount borrowed £3360
x 4.3% (interest)
= £144.48
x 2 (number of repayment years)
= £288.96

Add the interest and the original amount together = £3648.96

And to do the same again for your 3 year example;

£3360
x 3.8%
= £127.68
x 3
= £383.04

Total £3743.04

Does that make sense?

Seeing the calculations has helped, THANKS!