Loans are the only way out of a situation when you want to get what you want without long-term savings. You can take on credit, for example, a car, an apartment, household appliances, a trip abroad and much more. At the same time, it is important to calculate the annual percentage in order to be aware of the necessary payments.
Instructions
Step 1
Study the loan agreement carefully to see how much you borrowed. Write this value down on a piece of paper. Look at what amount, together with interest, you need to return the money to the bank, and also write down this numerical value on paper.
Step 2
Check out the loan maturity, which is indicated in the agreement itself or the payment schedule. To calculate the annual interest rate for this loan, subtract the amount of borrowed cash from the total amount of cash, including also interest. Divide the resulting value by the loan term, multiplying by 100%. This will give you the annual rate for the loan you borrowed.
Step 3
Try to calculate the annual interest on the loan in a different way. Add up all the loan payments from the graph. For convenience, create a table for yourself by placing the existing values in it. Add the amount of the commission if it was paid by you, for example, when receiving cash. In the event that you took out a loan using a payment card, you must also add the cost of the card's annual service to the amount received. Multiply the amount received by the interest rate specified in your loan agreement.
Step 4
Divide the result by the loan term, multiplying by 100%. Do not be intimidated by high interest rates: they imply the so-called "effective" interest rate on the loan. It is this percentage that the bank demanded in exchange for the use of borrowed funds.
Step 5
Consider also the fact that when drawing up a loan agreement, you could be connected to an insurance service. In this case, the contract must necessarily indicate an additional percentage for its payment. Read the official papers as carefully as possible and especially carefully study the information written in the small print.
