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Son's Homework on APR
10 Answers
My son has a homework question that I just can not get my head around......'If you borrow £1000.00, pay off 5% each month, but get charged an APR of 2% each month, how much interest are you being charged?'.....can anyone help with the answer please??
Answers
1st month pay £50 bal =£ £950+2% = £969. 2nd month pay £48.45 (5%) bal=£920.55 + 2% = £938.96 etc. etc.
12:51 Sat 19th May 2012
that sounds about right (I don't know if APR is calculated on the basis of compound interest or not, as I don't have any Life Skills).
So in month 1 you'd pay £1.70. But after 12 months the sum would have been reduced to £400, so the interest would have come down in 12 steps to 68p (and would continue on down).
I am open to correction by anyone who can actually do maths.
I don't know which figure they want as an "answer".
So in month 1 you'd pay £1.70. But after 12 months the sum would have been reduced to £400, so the interest would have come down in 12 steps to 68p (and would continue on down).
I am open to correction by anyone who can actually do maths.
I don't know which figure they want as an "answer".