<p>Basically the way that APR is calculated varies depending on the industry and who quoted it. On a car they calculate the APR by taking the monthly percent and multiplying by 12, the calculator is actually right.</p>

<p>You probably want to calculate APY (annual percentage yield). Check this article out: <a href="http://www.finweb.com/loans/how-do-they-calculate-your-car-loan-apr.html#axzz3lTowC0op" rel="nofollow">http://www.finweb.com/loans/how-do-they-calculate-your-car-loan-apr.html#axzz3lTowC0op</a></p>

CC BY-SA 3.0
2015-09-13T02:23:55.017Z
looks like a way to fool people. When I was talking with bank it was annual percent, for my car it was 10%. And then it magically converted to 0.83% APR.
antonte
CC BY-SA 3.0
2015-09-13T02:30:14.433Z
Witch is actually 10.47%. And now my mortgage bank suggesting me be-weekly payments. And I afraid whey will calculate new APR as my annual percent divided by 26. In my case 4%/26. Witch is translated to 4.077% comparing with 4.074% monthly APR.
antonte
CC BY-SA 3.0
2015-09-12T00:36:49.260Z
2015-09-12T00:36:49.260Z
Fasil Alemante
<p>Why monthly present in on line monthly payment calculator calculated as annual percent divided by 12? I think it's wrong, it should be exponential. For instance annual percent 4%. To calculate monthly percent we need to 1.04^(1/12). So monthly percent should be 0.327%, but if we use approach on on line calculators it is going to be 0.333.</p>

<finance><banking><interest-rate><debt>
Why monthly present in on line monthly payment calculator calculates as annual percent divided by 12?
antonte
# Why monthly present in on line monthly payment calculator calculates as annual percent divided by 12?

(Asked by: username_0 on 2015-09-11)

Why monthly present in on line monthly payment calculator calculated as annual percent divided by 12? I think it's wrong, it should be exponential. For instance annual percent 4%. To calculate monthly percent we need to 1.04^(1/12). So monthly percent should be 0.327%, but if we use approach on on line calculators it is going to be 0.333.

**Tags:** finance, banking, interest-rate, debt

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## 1 answers

### Answer by username_1 on 2015-09-12. Score: 2 | Accepted answer

Basically the way that APR is calculated varies depending on the industry and who quoted it. On a car they calculate the APR by taking the monthly percent and multiplying by 12, the calculator is actually right.

You probably want to calculate APY (annual percentage yield). Check this article out: <http://www.finweb.com/loans/how-do-they-calculate-your-car-loan-apr.html#axzz3lTowC0op>

> **Comments:**
> **username_0**: looks like a way to fool people. When I was talking with bank it was annual percent, for my car it was 10%. And then it magically converted to 0.83% APR.  
> **username_0**: Witch is actually 10.47%. And now my mortgage bank suggesting me be-weekly payments. And I afraid whey will calculate new APR as my annual percent divided by 26. In my case 4%/26. Witch is translated to 4.077% comparing with 4.074% monthly APR.  

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