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Say a loan is issued for 9 months with $1000 principal and with a payment plan consisting of about $162.23 each month. Does this loan have an APR of 46%?

  • Instead of asking a series of specific scenarios a better question is to ask how to calculate the APR given a number of payments, PV, FV and monthly payment – mhoran_psprep Nov 25 '14 at 18:55
  • Short answer: No – Noah Nov 25 '14 at 18:58
  • The question I linked to was answered in great detail. A TI BA35 calculator or similar finance calculator would be a great purchase. – JTP - Apologise to Monica Nov 25 '14 at 19:39
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The monthly rate is 8.322 %, found by solving the equation below.

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Giving an effective annual rate of (1 + i)^12 - 1 = 1.60977 = 161 %

or a nominal rate, compounded monthly of i*12 = 0.998646 = 100 %

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  • Wouldn't it be 146% since we have 9 x 162.23 / 1000? – user22347 Nov 25 '14 at 23:22

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