Mathematical Genius Required

[liznospam]

Simple example: if the rate was 1% per month, for the 12 months of the year, calculation would be:

((1+.01) to the power of 12) minus 1=1.126-1=0.126 ie 12.6%

 

So if the rate for 2 weeks=20%

There are 26 2 week periods in a year.

((1+0.2) to the power of 26) minus 1=114.47-1=113.47 ie 11347%

 

you need a scientific calculator with y with a little x to the top right of it, sorry I can't type the symbol.

[BritPat]

Simple example: if the rate was 1% per month, for the 12 months of the year, calculation would be:

((1+.01) to the power of 12) minus 1=1.126-1=0.126 ie 12.6%

 

So if the rate for 2 weeks=20%

There are 26 2 week periods in a year.

((1+0.2) to the power of 26) minus 1=114.47-1=113.47 ie 11347%

 

you need a scientific calculator with y with a little x to the top right of it, sorry I can't type the symbol.

 

Good try, the example paid back weekly which gives 13.07 p.w

[Redyam]

A loan of £200, paying back £240, over two weeks at £120 per week

 

APR, annual percentage rise of 760%

 

Effective interest rate: 120454%

 

 

Edit: If you borrowed the same amount at the same interest rate over 5 years, you would pay back £7600, £7400 of that would be interest.

[liznospam]

Good try, the example paid back weekly which gives 13.07 p.w

 

20% rate for 2 weeks is a weekly rate of (1.2 to the power of 1/2) which is 1.095 which is 9.5% each week. (The compounding makes it 20% over 2 weeks).

 

Do the calculation I gave in the example above at 9.5% over 52 weeks and it gives the same answer as 20% over 26 2 week periods. ie 11347%

[BritPat]

20% rate for 2 weeks is a weekly rate of (1.2 to the power of 1/2) which is 1.095 which is 9.5% each week. (The compounding makes it 20% over 2 weeks).

 

Do the calculation I gave in the example above at 9.5% over 52 weeks and it gives the same answer as 20% over 26 2 week periods. ie 11347%

 

You are not taking account of the repayments.