Monthly rate = What APR

BoGoF

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

cifpower

http://www.stoozing.com/mon2yr.htm

it equals 14.9% APR

Robert_Sterling_3

Does anybody disagree.

clio

yes me i do..

CLAPTON

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

I'd have said 15.95%

100*[(1.012408^12)-1]

clio

correct the apr is 15.9 well done too clapton & s-flint

Robert_Sterling_3

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.

Robert_Sterling_3

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.