# Loan calculation with percentage [closed]

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

• 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? – hmakholm left over Monica Jun 16 '18 at 12:12
• If I understand your payment schedule correctly, it corresponds to an effective annual interest rate of about 195 %. Quite usurious, that. – hmakholm left over Monica Jun 16 '18 at 12:21
• No, charging that kind of interest is not in any way, sort, or manner "friendly". – hmakholm left over Monica Jun 16 '18 at 12:37
• it might actually be illegal, depending on where you live – njzk2 Jun 18 '18 at 3:36

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.