Monthly rate = What APR

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BoGoF
BoGoF Posts: 7,099 Forumite
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Sorry if this seems a stupid question but if my monthly interest rate on a credit card is 1.2408% is the APR 12 times this, i.e. 14.9 %.

I am reviewing my credit cards and most have the APR on my statements but MBNA seem to be unique in printing the monthly rate


Thanks

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  • cifpower
    cifpower Posts: 6,502 Forumite
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  • Robert_Sterling_3
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    Does anybody disagree.
    ...............................I have put my clock back....... Kcolc ym
  • clio
    clio Posts: 3,345 Forumite
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    yes me i do..
  • CLAPTON
    CLAPTON Posts: 41,865 Forumite
    Combo Breaker First Post
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    The APR of a monthly rate of 1.2408% is 15.95% approx as the result is the compound interest based on paying 1.2408% per month..
    i.e. the interest is added to the capital each month and the next months interest is base on the sum of the capital and last months interest etc

    However, if you are only concerned to know approximately then multiplying by 12 is OK
  • sloughflint
    sloughflint Posts: 2,345 Forumite
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    I'd have said 15.95%

    100*[(1.012408^12)-1]
  • clio
    clio Posts: 3,345 Forumite
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    correct the apr is 15.9 well done too clapton & s-flint
  • Robert_Sterling_3
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    I always prefer the correct answer for an interest rate and not a dumbed down one.
    The Law is quite keen on the rioght answer to one decimal place too.
    ...............................I have put my clock back....... Kcolc ym
  • Robert_Sterling_3
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    CLAPTON wrote: »
    However, if you are only concerned to know approximately then multiplying by 12 is OK

    If you want it even more approximately call it 10% it makes it sound lower.
    ...............................I have put my clock back....... Kcolc ym
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