How do I work out APR's from Monthly Interest Rates

mummymoments

Can anyone please tell me how I work out an APR from a monthly interest rate.

I have two I need to calculate:-

MIR - 2.0084%

MIR - 1.527%

If anyone can help it would be gratefully appreciated.

Ta:eek:

lynzpower

I expect you multiply by 12, but im not 100%

Id simply call them up, ask, then ask them to lower them while you are on the line

sgx.saint

I could be having a blonde moment, but surely just multiply by 12?

So ....

MIR 1.527 = 18.324% - APR
MIR 2.0084 = 24.1% - APR

oscar52

It doesnt quite work ...... and i cant remember how it does ..... have a feeling its something to do with the statement / cycle dates, but i cant remember.

sgx.saint

I agree interest is a very funny thing. I used to work for Barclaycard and when we received our initial training 3 weeks was dedicated to learning how interest worked in relation to credit cards.

As you can see the training paid off lol, I can't remember how you extrapulate the APR from the monthly figures

CLAPTON

the correct formula to convert a monthly interest rate m to a APR is as follows

expresss m as a decimal so 2% is 0.02

APR = ((1+m) to the power of 12)-1

but multiplying by 13 gives a pretty good approximation and is a lot easier

so 2.0084 per month is APR of 26.95% (multiplying 13 gives 26.11%)
and 1.527 per month is APR of 19.4% (multiplying by 13 gives 19.85%)


in fact multiplying by 12 isn't too bad but it doesn't make any allowance for compound interest.

mummymoments

Thanks - I did'nt even think about multiplying by 12 - thick or what - I'm blaming the pregnancy!!!!

I would phone up but they are on hubby's CC's and hes having an ostrich moment (burying his head in the sand!!!)