Working out APRs

bexterwho

Anyone know if its possible to work out the APR from a monthly interest rate for credit cards? I'm trying to help out a friend but apparently the cc companies wouldn't tell her the APRs until the accounts were up to day. The monthly interest rates for them are 1.527% and 1.363%

Bokken_2

Welcome to MSE

18.32% pa.
16.35%pa.
Times the monthly rate by 12 = APR rate per annum.

bexterwho

Doh! Should have been able to work that one out really! Thanks

Bokken_2

And of course if you have a annual percentage rate and want to work out the monthly rate/amount you would pay divide by 12.
But you knew that right.

bexterwho

alright now, don't be sarky!!:D

tomstickland

The monthly rate is 1/12th of the annual GROSS rate and the APR includes compounding, but the two will be close anyway.

nomoneytoday

Not quite.
It is 1+monthly rate/100 to the power of 12

i.e. 19.9% and 17.6%

(If you don't may interest back monthly it compounds)

YorkshireBoy

Bokken wrote:

18.32% pa.
16.35%pa.
Times the monthly rate by 12 = APR rate per annum.

I believe the correct answers are...

1.527% monthly = 19.94% APR
1.363% monthly = 17.64% APR

...allowing for compounding.

Bokken_2

nomoneytoday wrote:

Not quite.
It is 1+monthly rate/100 to the power of 12

i.e. 19.9% and 17.6%

(If you don't may interest back monthly it compounds)

Thanks for the update I have learnt something there.
Of course the best thing is to aim to pay no interest all.
I haven't paid any for the past 2yrs since finding this site and I would urge others to pay very little or none at all.