# Calculating the representative APR on a credit card.

• Aug 4th 2011, 03:07 PM
Calculating the representative APR on a credit card.
Hi all,

I am trying to calculate the representative APR on the Sainsburys gold credit card.

The numbers and percentage rates are based on the ones given in the terms, see the spreadsheet.

Here is a shared Google spreadsheet with my formulas in them, you can edit it:

This is the original with no edit:

Basically I work out the rep APR to be 4%, it should be 21.1%, where am I going wrong?

I know this is probably in the wrong sub-forum but if you can point me towards the right one that would be awesome - not sure what branch of maths this comes under.

Thanks
• Aug 4th 2011, 06:42 PM
TKHunny
Re: Calculating the representative APR on a credit card.
It is very unlikely that you understand the terms of your service agreement. EXACTLY what terms are stated? EXACTLY what method is disclosed? EXACTLY how it hte rate quoted on your statement?
• Aug 5th 2011, 02:44 AM
Re: Calculating the representative APR on a credit card.
Your right, I do not understand the terms that allow you to calculate the APR, thats why I need help!

From the terms:
http://www.sainsburysbank.co.uk/libr...CARDCLDATA0009

Quote:

3.2
APR for the agreement is 20.1%.

You make one purchase of £1200 immediately.

Credit is provided for one year and repaid in 12 equal monthly instalments.

3.3
Interest of 9.94% per annum compounded.

4.
Total amount payable
If you used your card to make a purchase of £1,200 at the start of the agreement and
repaid it in 12 equal monthly instalments at the standard interest rate for purchases set
out in condition 3.3, the total amount payable would be £1,323.23. This includes 12 monthly fees of £5 each.

5.1
We will charge a monthly fee of £5 in each month that your account is open.
• Aug 5th 2011, 03:35 AM
dexteronline
Re: Calculating the representative APR on a credit card.
Quote:

Your right, I do not understand the terms that allow you to calculate the APR, thats why I need help!

From the terms:
http://www.sainsburysbank.co.uk/libr...CARDCLDATA0009

What is your monthly payment to Sainsbury

For the figures you quoted I am getting a monthly amount of £113.5
• Aug 5th 2011, 02:42 PM
TKHunny
Re: Calculating the representative APR on a credit card.
Quote:

Your right, I do not understand the terms that allow you to calculate the APR, thats why I need help!

Methinks you also do not understand the meaning of my comments.

The terms of the agreement are written to be in compliance with applicable law. They are NOT written to be clear or comprehensible.

My best current guess, including the 9.94% Compounded Monthly, no pre-payment option, and an extra 5.00 / month is only 18.7864% The total paid is 1,325.59, so I am in the neighborhood. I might have the 5.00 charge too late. It's just not always clear when to do what. Does the agreement say exactly when the 5.00 charge will be taken?
• Aug 6th 2011, 06:22 PM
Wilmer
Re: Calculating the representative APR on a credit card.
3.3
Interest of 9.94% per annum compounded.
4.
Total amount payable
If you used your card to make a purchase of £1,200 at the start of the agreement and
repaid it in 12 equal monthly instalments at the standard interest rate for purchases set
out in condition 3.3, the total amount payable would be £1,323.23. This includes 12 monthly
fees of £5 each.
.................................................. .................................................. ...........................
1200 borrowed at 9.94% annually compounded monthly over 12 months requires monthly payments
of 105.465581.....