Converting APR to monthly repayments

According to Wikipedia: The term annual percentage rate of charge (APR), corresponding sometimes to a nominal APR and sometimes to an effective APR (or EAPR), describes the interest rate for a whole year (annualized), rather than just a monthly fee/rate, as applied on a loan, mortgage loan, credit card, etc.

https://en.wikipedia.org.

Effective APR

The plugin uses Effective APR by default. If you want monthly or some other period of repayment you need to calculate the interest rate for the repayment period.

This is the formula for Effective APR:

r = (1 + i)^1/n – 1

where:

r = rate per period
i = annual interest eg: 8% is 0.08
n = number of payments in a year

Example:

With 14.9% interest per year with monthly payments the rate is:

r = (1 + 0.149) ^1/12 – 1

r = (1.149) ^0.8333333 – 1

r = 1.01164 – 1

r = 0.01164

r = 1.164%

All very simple and can be used for weekly or even daily repayments in most of the world.

Nominal APR

If you are in the USA and want to use nominal APR the formula is:

r = (1 + i) / n

where:

r = rate per period
i = annual interest
n = number of payments in a year

Example:

Given 14.9% interest per year with monthly payments the rate is:

r = 14.9 / 12

r = 1.2141%

Once you have the interest rate for the repayment period you can plug it into the amortization formula.