How do you calculate annual percentage rate
• Find the current balance, or amount owed, on your card using the most recent statement. • Find the finance charge on your card using the most recent statement. • Divide your finance charge by the amount owed. • Multiply the answer by 100 to get a percent; this is your finance charge or interest charged monthly. Multiply the monthly charge by 12; the answer is your annual interest (percentage) rate, also known as “APR.” • Locate an APR calculator online. • Determine the amount you intend to borrow and enter the loan amount where indicated on the calculator. • Enter the extra costs of securing the loan (fees) where indicated on the calculator. • Enter the given interest rate, which represents the interest rate per year without the additional fees. • Enter the life of the loan, also known as the number of months (for example, a 3-year loan would be 360 months). Hit the “calculate” button to get the APR, which will be different from the interest rate and represents the real cost of the l
