Unit 2 - Personal Finance : APR

Question 1

What is APR

Answer 1

Annual percentage rate - the interest rate when you borrow money

Question 2

APR formula

Answer 2

C = A₁ / (1 + i)ᵗ¹ + A₂ / (1 + i)ᵗ²+ … + Aₓ / (1 + i)ᵗˣ

C is the amount of money borrowed
i is the APR
A is the amount paid, the small number is the year indicator
t is the time in years between the start of the loan and the payment, the small number is the number of years