Are you APR aware? Poll results & discussion

JDPower

Might have been more interesting to have a 'Don't have a clue' option just to see what percentage really don't know and wouldn't have a clue how to work it out.

MSE_Martin

Might have been more interesting to have a 'Don't have a clue' option just to see what percentage really don't know and wouldn't have a clue how to work it out.

I think the poll results gives a pretty good idea of that!

edda

Does anyone know how many stars there are in the sky?

Or is that next week's poll?

JDPower

MSE_Martin wrote: »

I think the poll results gives a pretty good idea of that!

Not in my opinion. How do you distinguish between the ones that half understood and got it wrong and those that didn't have the slightest idea and just made a random guess?

kobukson

For all you money saving experts out there, I think the answer is M :j & if anyone wants to borrow a £10 at those rates I have loads waiting here for you. :T

bonnieheather

crikey! wish i had stuck in at maths class now lol
obviously why i am in debt eh

bonnie

gravitytolls

pkempc wrote: »

If the £10 debt was repaid with £1 interest on top after one day then the flat rate of interest is 10%.

If, over the course of a year, that single £10 for a day was all you borrowed and you only paid the single £1 interest charge then the Annual Percentage Rate is £1 ÷ £10 = 0.1 x 100 = 10% APR.

However, if immediately after repaying the £10 you then borrowed another £10 and paid that back the next day with £1 interest and then repeated this every day for the next year then you would pay a total of £365 (£366 in a leap year) in interest for a daily loan facility of just £10.

The Annual Percentage Rate could then be calculated as £365 ÷ £10 = 36.5 x 100 = 3,650% APR.:think:

However, this APR figure doesn't take into account any compounding of interest, loan application fees, reservation fees, fees for not paying by direct debit, penalties for late payment or early settlement, loan discharge fees or any other fees the lender can get away with!

Where's the smiley for my head blowing up?

milesoneill

By my calcs the APR is 3650%, or 3660% if it's a leap year!

Daily interest is 10% (£1 interest for every £10 borrowed)
Multiply by days in the year and you get 3650%

Compound interest would mean a grand total of £12,833,055,803,133,500.00 which you will need to pay at the end of the year :eek:

£14,116,361,383,446,900.00 if you're unlucky enough to borrow in a leap year:rotfl:

Miles.

JMitchell_2

To all the people talking about the fact you may or may not have paid back the pound - it doesn't matter.

How much you pay back each month doesn't affect the APR of your credit card, it affects how much interest YOU pay. Those are entirely different things. The answer is the huuuuge number people have been mentioning. I picked the one below that (was it £10 Billion?) when I had a stab at it before going for the calculator
.

cm233lh

What are you people all talking about? You borrow £10. You pay back £11. One year later you've paid £11 back on a loan of £10. That's 10% according to my school-boy maths. What other answer could there be?