# Formula to calculate the %APR on a weeklt loan

1. ## 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.

Tony  Register To Reply

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

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3. ## 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  Register To Reply

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

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5. ## Re: Formula to calculate the %APR on a weeklt loan Originally Posted by tonicdesigns 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.  Register To Reply

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

Thats brilliant. Thank you very much for this  Register To Reply

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