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April 29th, 2013, 09:11 AM   #1
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Help with APR calculation

Hello everyone, I am trying to determine the interest rate based on this monthly payment formula:

M = P(1+r)n r / [(1+r)n-1]

Can anyone solve for r?

Thanks in advance.
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April 29th, 2013, 09:33 AM   #2
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Re: Help with APR calculation

Please post a topic only once, as doing so multiple times runs the risk of duplication of effort on the part of our contributors, whose time is valuable.

Your formula doesn't look correct...shouldn't you have some exponents?
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April 29th, 2013, 09:42 AM   #3
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Re: Help with APR calculation

Sorry, didn't have the formula in the right format.

M = P(1+r)^n*r / [(1+r)^n-1]

I got the formula from this website:
http://math.fau.edu/qian/course/MGF1...%20formula.htm
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April 29th, 2013, 07:04 PM   #4
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Which would you prefer: (a) a neat formula which is approximate, may not be accurate enough for you, and is different for each value of n or (b) a method of approximating r that is tedious and repetitive, but gives you whatever accuracy you require if repeated often enough?
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April 29th, 2013, 08:17 PM   #5
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Re: Help with APR calculation

Formula is less "wieldy" this way:

M = Pr / [1 - (1 + r)^(-n)]
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