How can i work out my apr

mazza7103

i have a virgin credit card but they only tell you the monthly rates. how do i work out the apr? do i just multiply by 12?

CLAPTON

well the formula is

where x is the monthly interest rate as a decimal

((1+x)^12) -1 where ^ means 'raised to power'

however multiplying by 12 or 13 gives a reasonable approximation (12 works better for lower APRs whereas 13 is better for higher APRs)

Nuclear_Themes

mazza7103 wrote: »

i have a virgin credit card but they only tell you the monthly rates. how do i work out the apr? do i just multiply by 12?

Multiplying by 12 won't take into consideration compounding. A correct way to work it out is (100 * (monthly interest ^12 ) ) - 100.

Joe_Bloggs

If you are going to quote formula then give some examples of how to use it.
J_B.

talana

Joe_Bloggs wrote: »

If you are going to quote formula then give some examples of how to use it.
J_B.

Seems pretty clear to me. What aren't you understanding?
Try it.

Fruit_and_Nut_Case

talana wrote: »

Seems pretty clear to me. What aren't you understanding?
Try it.

The use of the ^ operator may not be common knowledge.

January20

Fruit_and_Nut_Case wrote: »

The use of the ^ operator may not be common knowledge.

Absolutely! Although I understand the formula, my understanding is limited and I have no idea of how to work out "raised to power". You could be speaking Greek to me when you are saying that. (Doesn't help that English is my second language either and I did all my maths learning in my mother tongue).

Shame, as I opened this thread because I thought I might learn something useful. Instead, it's reminded me of why I gave up on maths: jargon - that mathematicians do not expect to have to explain!

Fruit_and_Nut_Case

January20 wrote: »

Absolutely! Although I understand the formula, my understanding is limited and I have no idea of how to work out "raised to power". You could be speaking Greek to me when you are saying that. (Doesn't help that English is my second language either and I did all my maths learning in my mother tongue).

Shame, as I opened this thread because I thought I might learn something useful. Instead, it's reminded me of why I gave up on maths: jargon - that mathematicians do not expect to have to explain!

OK then. Use the calculator on this page.

mazza7103

cool the calculator is simple enough for me. i wanted to compare my cards. its highly than i thought it was but not as bad as my capital one

Nuclear_Themes

January20 wrote: »

Absolutely! Although I understand the formula, my understanding is limited and I have no idea of how to work out "raised to power". You could be speaking Greek to me when you are saying that. (Doesn't help that English is my second language either and I did all my maths learning in my mother tongue).

Shame, as I opened this thread because I thought I might learn something useful. Instead, it's reminded me of why I gave up on maths: jargon - that mathematicians do not expect to have to explain!

If you're struggling to understand it, type it into the calculator on your computer with the monthly interest where specified and you should get the answer you were looking for.

CLAPTON

Nuclear_Themes wrote: »

Multiplying by 12 won't take into consideration compounding. A correct way to work it out is (100 * (monthly interest ^12 ) ) - 100.

this is incorrect .. see my post above