Caculating Annual Percentage Rate

  • Thread starter Thread starter Roy
  • Start date Start date
R

Roy

I would like to caculate the Annual Percentage Rate
(APR). These are basic bank and credit union examples of
their rates. I would like to plug in an amount and see
what it looks like at the end of some period of time.

Example #1 - The rate is 1.56 componded and credited
monthly.

Example #2 - The rate is 4.75 compounded daily and
credited monthly X 1 to 5 years.

Any help anyone can give would be greatly appreciated.

Thank you,

Roy-
 
Using your first example

=FV(1.56%*12,1,,-100)

with 100 as the amount

--


For everyone's benefit keep the discussion in the newsgroup.

Regards,

Peo Sjoblom
 
Hi Roy!

Since you say these are "bank and credit union examples of their
rates" I suspect that they are already APRs.

Example #1 means that 1.56%/12 is compounded and credited monthly.

Example #2 means that they calculate interest on the daily outstanding
balance and credit this interest to the account monthly. In
calculating the daily interest they will use the daily effective
equivalent of the APR which is found using:

=(1+4.75%/12)^(12/365)-1

But check the small print of documents and you'll find the crucial
definitions.
 
Thank you for the information


Peo Sjoblom said:
Using your first example

=FV(1.56%*12,1,,-100)

with 100 as the amount

--


For everyone's benefit keep the discussion in the newsgroup.

Regards,

Peo Sjoblom
Click to expand...
 
Thank you very much....

Peo Sjoblom said:
Using your first example

=FV(1.56%*12,1,,-100)

with 100 as the amount

--


For everyone's benefit keep the discussion in the newsgroup.

Regards,

Peo Sjoblom
Click to expand...
 
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