Interest Payable

[Bob906]

Could anyone tell me how to work out what interest is payable monthly when the APR is 39.7%

[PatriciaH]

For how much in �... thats a really high APR

[Stephen_G]

If you divide your rate by 12 then it'll give you what you should be paying for the month.

39.7% / 12 = 3.308%

[DungeonJayne]

39.7% ?

Was that loan from the local Mafia ?

[Bob906]

No Jayne it is off a catalogue company don't know if i can name them on here

[gossipgirl]

thats high APR. i think it works out as for say as you lent �100 you will be paying them nearly �40 in interest. But then again maths was never my strong point lol

[DungeonJayne]

Isn't it possibly worse than that, gossipgirl ...

You pay �40 (okay, �39.70) in year 1.

If you only managed to pay back �50 (�10 + the interest), then in year 2 you'd pay �36.

In year 3 you'd pay �32.

Etc.

If you paid back half the money over 5 years, you'd have paid �170 in interest, and still owe �50.