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This question is about apr vs apy.
How do you calculate APR?
The formula for calculating APR is APR = ((interest rate + fees) / principal) / length of loan in days)) x 365 x 100. For those of us who forgot the order of operations, this is what you do:
Add together the interest rate and fees.
Divide that by the amount of the principal or amount of money you've been lent.
Then, you divide that number by the length of the term of the loan in days.
Follow that by multiplying it by 365 for the number of days in a year.
The number you end up with should be a decimal. In order to translate that into a percentage, multiply it by one hundred.
There are also several online calculators that will do these calculations for you, just asking you to enter in the relevant numbers.
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