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Math Help - Calculating the representative APR on a credit card.

  1. #1
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    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:
    https://spreadsheets.google.com/spre...hl=en_GB#gid=0

    This is the original with no edit:
    https://spreadsheets0.google.com/spr...hl=en_GB#gid=0

    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
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  2. #2
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    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?
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  3. #3
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    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

    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.
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  4. #4
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    Re: Calculating the representative APR on a credit card.

    Quote Originally Posted by trader7 View Post
    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
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  5. #5
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    Re: Calculating the representative APR on a credit card.

    Quote Originally Posted by trader7 View Post
    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?
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  6. #6
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    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.....
    Add 5 for fees: 110.465581...
    110.465581... * 12 = 1325.58697... : as per TKHunny

    Are you able to follow that part?

    Now, use 110.465581 as the required monthly payment;
    this results as 18.78636...annual compounded monthly, the APR.
    Again, as per TKHunny...you OK now?
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