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I want to know monthly payment with percentage. Let's say I took loan of $200 and I have to pay monthly for 5 months and amount pay back is $260. Over here $60 is interest. I could make out that I have to pay $52 each month to make $260 at the end of 5 months. Kindly help to calculate percentage

closed as off-topic by Dheer, Pete B., Joe, user42405, Victor Jun 25 '18 at 13:46

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  • "Questions about accounting are off-topic unless they relate directly to personal finance or investing from an individual's perspective." – Dheer, Pete B., Joe, Community, Victor
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  • Is this homework of some sort? What do you need to express as a percentage of what, and what do you need that number FOR? – Henning Makholm Jun 16 '18 at 12:12
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    If I understand your payment schedule correctly, it corresponds to an effective annual interest rate of about 195 %. Quite usurious, that. – Henning Makholm Jun 16 '18 at 12:21
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    No, charging that kind of interest is not in any way, sort, or manner "friendly". – Henning Makholm Jun 16 '18 at 12:37
  • it might actually be illegal, depending on where you live – njzk2 Jun 18 '18 at 3:36
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Loan equation is

s = (d - d (1 + r)^-n)/r

where

s = principal
n = number of periods
d = periodic payment

s = 200
n = 5
d = 260/n

∴ r = 0.0943489 per period

12 r = 1.13219

So the APR is 113% nominal, compounded monthly.

The effective annual rate is 195%.

(1 + 0.0943489)^12 - 1 = 1.95032

Plot or solver is required to obtain r.

enter image description here

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