How To Work Out Apr?

[kaw69]

Hi
My neighbour is borrowing £100 for 2 months and has agreed to pay his friend £10 extra
Q. are my maths right that it is 10% X 6 to work out the APR = 60%
TIA

[Buenchico]

I've got a maths degree and I still try to avoid APR calculations. They're incredibly complex!
https://en.wikipedia.org/wiki/Annual_percentage_rate#European_Union


However a bit of cheating (by using an online calculator) produces an APR of around 80%
http://www.thisismoney.co.uk/money/cardsloans/article-1633405/Loan-repayment-calculator.html

[kaw69]

Thanks B. I used the link and was surprised at the APR being so high

[Jackdaw33]

Is APR the same as compound interest? I could never get my head round the formula for the latter.

[Buenchico]

^^^ The formula is about a zillion times harder, JD33. (See my first link, above!)

[Old_Geezer]

10% after just 2 months ?
Some friend !
A pint should've covered it, and that'd be high enough.

[EDDIE51]

The apr may be high but nothing compared to Payday loan companies who regularly charge over 1100% apr.