Looking at a car advert [for a car I was considering buying in April 2008] but in the end I didn't - this was what the advert stated:
2005 TOYOTA COROLLA 1.4 VVTi 5 door hatchback £7195 From £38 per week
The advert stated that it was 16.1% APR typical, a 60 month payment, 260 weekly payments in the small print.
According to the Bank of England the interest rate was 5.00% at the time
Would this be the correct type of calculation:
Total price x interest rate ÷ number of weeks
The advert stated APR was 16.1% APR typical.
Another advert from the same issue of the magazine, and an example:
2004 HONDA CIVIC 1.6 i-VTEC SE 5 door Hatchback £6,999 £113.15 per month
APR 9.9% [as quoted in advert], 58 monthly payments
There was also this in an advert from another dealer:
2003 BMW 325i £7477 TYPICAL APR 12.9% 60 monthly payments £167.05
What are the calculations that i would I need to do to work out how the advert comes to a £ per week figure or the monthly payment figures?
This is not homework help - it is simply a request to try and understand this complex situation.
I would appreciate it if anyone could help me and give me a basic understanding of the calculations for this as a sort of ready reckoner.