What is the best way to explain the difference between the fixed rate i.e. 6.75% and the APR at 6.90%?
446766
The APR is the required method used by the government that allows people to compare the combination of rates and fees offered by different companies.  The APR is always higher than the interest rate because it takes the fees for the loan into the calculation.  The APR is only used for comparison and will never again factor into the loan.  If they want to reduce the interest rate by paying points up front this is a way to compare the different options by looking for the low APR.\n\nMost people are fine with this expl. because you mention it is the governments fault that this crazy number is on the TIL.  Also you mention it will never again affect the loan after they close. \n\nGood luck this is the hardest question in all of lending.
1167577
The effective annual rate of return taking into account the effect of compounding interest. APY is calculated by:\n\n= (1 + periodic rate) # of periods - 1\n\n \nThe resultant percentage number assumes that funds will remain in the investment vehicle for a full 365 days.
1153478
B is the answer.  If they pay before interest kicks in, no cost other than the goods themselves are involved. "0" percent APR.
1152638
here is a link for a calculator\nhttp://mortgages.interest.com/content/calculators/discount.asp\n\nit depends on how long you want to keep the property. \nlet's say for $500,000 loan @ 6.5% your interest payment is $2708.. if you want to "buy it down" to 6.00% and pay 1 point.. then, your interest payment @6% would be $2500... and it would cost you $5,000... it means it will take you 5000/(2708-2500)= 24 months to recoup the point.. so, paying this points will make sense if you will keep the loan for 24+ months
149317
There really are no calculations because they are not charging you ANY interest at all (probably for a certain amount of time only, right?) You will only be paying the Principle during that time, which means you are making a payment that actually reduces the total cost by the exact amount you pay.  WHen interest begins accruing, then each payment you make will be partially going to the product cost (prinicple) and partially to the interest cost (the creditor's profit for lending the money).  There is no better interest rate than 0%.  So, good going!
764508
Depends on your investments. Stocks or bonds? Fixed or variable rates/returns? Example, if you're investing in a fixed rate @ 3% and rates go up to 5%...you'll make less because your fixed rate is 3%. If rates go down to 2%, you'll make more.
556597
You want to check bank interest rates on line, compare, and then decide.\n\nWorld Savings and Loan I worked for many years ago, they don't always have the best rate available.
913463
12%\n\nThe rate paid on the loan is 12% (assuming simple interest rather than compounding). The compensating balance is just cash kept as a deposit, which the company gets back.  This doesn't affect the interest on the loan - just opportunity cost.
487839
Need to know how much you invested at what interest rate first.
384122
Choose x to stand for the amount invested at 10%.  The remaining amount would be 15,000 - x.  It's invested at 6%\n\nChange the percents to decimals, multiply them by their amounts, and add them up to get the total interest:\n\n.10(x) + .06(15000 - x) = 1260\n\nDistribute the .06: .10x + 900 - .06x = 1260\n\nCombine like terms: .04x + 900 = 1260\n\nSubtract 900 from both sides:  .04x = 360\n\nDivide both sides by .04: x = 9000\n\nFind the other number:  15000-9000=6000\n\nSo, $9000 at 10% and $6000 at 6%.\n\nHope that makes sense!
1148875
The *right* way to figure this out is to use an algebraic\nformula, but I think it's easier to visualize if you use a\nspreadsheet.\n\nIt's slightly difficult to present a table in Yahoo Answers\nbecause everything is jammed hard against the left\nmargin.  [I'm not sure why that's a feature.]  To help\nreduce the column misalignment, I displayed all of the\nnumbers with a constant width (ie. with leading zeros\nwhen necessary).  Bottom line is that you'd have\n$30344.87 at the end of eleven years.\n\nYear == years since start of account (in half year increments)\nRate == interest rate\nBalance == running balance of account\nInterest == interest payment for previous 6 months\n\n\nYear    Deposit     Rate   Balance  Interest\n\n00.00    820.00     0.000  00820.00   0000.00\n00.50    820.00     1.050  01681.00   0041.00\n01.00    820.00     1.050  02585.05   0084.05\n01.50    820.00     1.050  03534.30   0129.25\n02.00    820.00     1.050  04531.02   0176.72\n02.50    820.00     1.050  05577.57   0226.55\n03.00    820.00     1.050  06676.45   0278.88\n03.50    820.00     1.050  07830.27   0333.82\n04.00    820.00     1.050  09041.78   0391.51\n04.50    820.00     1.039  10214.41   0352.63\n05.00    820.00     1.039  11432.77   0398.36\n05.50    820.00     1.039  12698.65   0445.88\n06.00    820.00     1.039  14013.90   0495.25\n06.50    820.00     1.039  15380.44   0546.54\n07.00    820.00     1.039  16800.28   0599.84\n07.50    820.00     1.039  18275.49   0655.21\n08.00    820.00     1.039  19808.23   0712.74\n08.50    820.00     1.039  21400.76   0772.52\n09.00    820.00     1.039  23055.38   0834.63\n09.50    820.00     1.039  24774.54   0899.16\n10.00    820.00     1.039  26560.75   0966.21\n10.50    820.00     1.039  28416.62   1035.87\n11.00    820.00     1.039  30344.87   1108.25\n\nAdditional comment:\n\nOh man, I messed this up.  Thanks to "Mark Taranto"\nfor catching and correcting my mistake.  \n\nI took yet another look at this and want to\nwork through it carefully.  We appear to have\nas many different answers as there are people\nsubmitting solutions.\n\nOn day 1, Joanne put in $820, so that's her's balance.\n\nAfter 1/2 year, the bank would add half of 5% interest,\nwhich is 820*.025 = 20.50 and Joanne would add another \n$820.  So after six months, she would have:\n\n$820 + $20.50 + $820 = $1660.50\n\n\nAfter one year, the bank will again add half of 5% as\ninterest, which would be $1660.50 * 0.025 = $41.51.  \nThen Joanne would add $820, so the new total would be:\n\n$1660.50 + $41.51 + $820 = 2522.01\n\nContinuing this process in the spreadsheet, the\nfinal result after 11 years is:\n\n$23809.46\n\nThe corrected spreadsheet follows:\n\nYear  Deposit  Rate    Balance  Interest\n\n00.0  820.00  0.0000  00820.00  000.00 \n00.5  820.00  0.0250  01660.50  020.50\n01.0  820.00  0.0250  02522.01  041.51\n01.5  820.00  0.0250  03405.06  063.05\n02.0  820.00  0.0250  04310.19  085.13\n02.5  820.00  0.0250  05237.94  107.75\n03.0  820.00  0.0250  06188.89  130.95\n03.5  820.00  0.0250  07163.62  154.72\n04.0  820.00  0.0250  08162.71  179.09\n04.5  820.00  0.0250  09186.77  204.07\n05.0  820.00  0.0195  10185.92  179.14\n05.5  820.00  0.0195  11204.54  198.63\n06.0  820.00  0.0195  12243.03  218.49\n06.5  820.00  0.0195  13301.77  238.74\n07.0  820.00  0.0195  14381.15  259.38\n07.5  820.00  0.0195  15481.59  280.43\n08.0  820.00  0.0195  16603.48  301.89\n08.5  820.00  0.0195  17747.24  323.77\n09.0  820.00  0.0195  18913.31  346.07\n09.5  820.00  0.0195  20102.12  368.81\n10.0  820.00  0.0195  21314.12  391.99\n10.5  820.00  0.0195  22549.74  415.63\n11.0  820.00  0.0195  23809.46  439.72
129625
The increase is 624$ on 3900$.The % increase is 624/3900*100=16%.\nTo cross check the answer,3900*16%=624$.
216093
compounded anually would use the equation: A=P(1+ (rate))^(#number of years) where A is total amount, and P is the starting amount.\ncompounded quarterly would be A=P(1+(rate/4)^(4(# of years))\nA and P are the same as above. (and rate is in decimal form for both, so 6% would be 0.06)\nSo you could plug in numbers to determine the difference.\nex: start with $1,000 with a rate of 6% and 10 years\nanually: A=1,000(1+ 0.06)^(10)\nA= 1,000(1.06)^(10)\nA= 1,000(1.79)\nA= $1,790.85\n\nquarterly: A=1,000(1+(0.06/4)^(4(10))\nA=1,000(1.015)^(40)\nA=1,000(1.81)\nA= $1,814.02\n\nSo, coumpounded quarterly earns you more money.
242661
Annual Percentage Rate .\n\nA yearly rate of interest that includes fees and costs paid to acquire the loan. Lenders are required by law to disclose the APR. The rate is calculated in a standard way, taking the average compound interest rate over the term of the loan, so borrowers can compare loans. In mortgages, it is the interest rate of a mortgage when taking into account the interest, mortgage insurance, and certain closing costs including points paid at closing. ...
459426
For compound Interest.\nA = a*(1+p/n)^(y*n)\n\nA = Final amount\na = Original amount\np = interest percentage (in this case = 6.5/100)\nn = no of times calculated/year\ny = no of years\n\n18000 = 9000(1.0325)^2y\n2 = 1.0325^2y\n\ny = [Log(with base 1.0325) 2] / 2\n\nRemembered anohter thing to help...Change of base rule\n\nlogx(b) = loge(b) / loge(x)\n\nSo next step would be..\n\ny = [ln(2) / ln(1.0325)]/2\n  = 10.836\n~~ 11 yrs
253370
APR is the true cost after adding all the closing costs and fees  Posted rate is what the base loan is figured at before you add all the fees you can't pay cash for and then finance it for a bizillion years of interest
237881
Assuming this is a consumer and not a commercial loan: your annual percentage rate (APR) should be disclosed to you in the Truth in Lending (TIL) disclosure... It's that piece of paper with the big square boxes that has the APR, the amount financed, etc.\n\nIf it's a credit card: the TIL should be on the back of the initial application.\n\nIf it's for a mortgage, it should be on separate TIL.\n\nFor car loans, you will see it on the combined note/TIL that you signed at the dealer.\n\nIf it's for a home equity line of credit, you'll find the APR disclosed in the combined Note/TIL.