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May 11th, 2011, 09:27 AM   #1
Joined: May 2011

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APR Equation

I have found the following formula to calculte the apr. I would like to know why there is a 2 in the equation?

i = 2 x n x I /( P(N + 1)) in which
i is the APR
n is the number of payment periods in one year
I is the total financing charges (mostly interest)
P is the principal (the amount borrowed), and
N is the number of scheduled payments
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