I used a loan calculator which gives an effective rate of 80.781 whereas wikipedia http://en.wikipedia.org/wiki/Annual_percentage_rate gives a rate of 49% for these parameters:
- borrowed: 100
- fees: 10
- rate: 5% per month (60% per year)
amortization table is:
t1 -> 5.50 6.91 103.09
t2 -> 5.15 7.26 95.83
The rate of wikipedia is much lower than the annual nominal rate of 60% so it's misleading the consumer somehow whereas 80.80 seems closer to reflect this costfull loan.
I don't care about who is right or wrong, I know how wikipedia calculates its rate, I cannot find out how the software calculates it. So my question is: can you deduce their formula ? Excel function equivalents would be fine for the answer.