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Formula to calculate the %APR on a weeklt loan

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    Formula to calculate the %APR on a weeklt loan

    Hi I was wondering if someone could help me with this. I have figures for a 10 week loan including the yearly APR% but need to find the formula that calculates the APR%, so work backwards. These are the figures I have

    loan amount - 350.00
    Loan Charge - 175.00
    Loan Period - 10 weeks
    Weekly Repayments - 52.50
    Weekly interest - 5%
    Annual Interest - 260%
    APR - 5763.6%

    Can anyone help with the formula that would calculate the APR figure based on the above.

    Thanks in advance
    Tony
    Last edited by tonicdesigns; 05-22-2014 at 11:50 AM. Reason: Spelling mistake

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    Re: Formula to calculate the %APR on a weeklt loan

    [....deleted....]
    Last edited by joeu2004; 05-22-2014 at 07:00 PM. Reason: misdirection

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    Re: Formula to calculate the %APR on a weeklt loan

    Hi joeu2004

    thanks for the reply. As far as I can see, the figures are correct

    Loan Amount is 350.00
    Loan Charge is 175.00
    Total to pay back is 525.00
    Loan Period is 10 weeks
    10 weekly repayments of 52.50
    weekly interest is 5%
    interest for loan period is 50%
    yearly interest is 260%
    APR is stated as 5763.6%

    To answer your question, yes a weekly rate is annualized by multiplying by 52
    Thanks again and hope this helps

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    Re: Formula to calculate the %APR on a weeklt loan

    [....deleted....]
    Last edited by joeu2004; 05-22-2014 at 06:59 PM. Reason: misdirection

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    Re: Formula to calculate the %APR on a weeklt loan

    Quote Originally Posted by tonicdesigns View Post
    As far as I can see, the figures are correct
    Loan Amount is 350.00
    Loan Charge is 175.00
    Total to pay back is 525.00
    Loan Period is 10 weeks
    10 weekly repayments of 52.50
    weekly interest is 5%
    interest for loan period is 50%
    yearly interest is 260%
    APR is stated as 5763.6%
    Aha! I see I misinterpreted "loan charge" as "loan fees". The two are very different. You are using "loan charge" correctly: total interest.

    Also, I misunderstood the type of loan. There are two types based on how interest is repaid: finance charges v. amortization. I was thinking of the latter. But yours is the first kind.

    In that case, all of the terms of the loan are copacetic. So I deleted my previous responses because they are misdirections.

    The APR is calculated as follows:

    =(1+RATE(10,52.50,-350))^52 - 1

    In effect, it determines the "effective" (compounded) annual rate for the equivalent amortized loan.

    [EDIT] I might note that APR calculated in this manner is a fictitious rate. Some believe it is useful for comparing loans. I do not. In any case, it has nothing to do with how periodic interest is calculated and repaid in reality.
    Last edited by joeu2004; 05-22-2014 at 07:15 PM. Reason: cosmetic

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    Re: Formula to calculate the %APR on a weeklt loan

    Thats brilliant. Thank you very much for this

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