Talk:Annual percentage rate

message: I've tagged this article with refimprove and confusing. The former tag is because the entire article is basically OR; there's only one reference given. All of the calculations, formulas, and so on are entirely unsourced. The confusing tag was added because I find the text of the page rather jumbled. To someone with little or no experience working with finance math, this article is obtuse. — HelloAnnyong (say whaaat?!) 23:12, 3 June 2008 (UTC)
thread_title:  Tags 

message: The following paragraph was added at the top of the Does not represent the total cost of borrowing subsection back in July.  I do not think that it is appropriate in the encyclopedia for two reasons.
# The first sentence is factually incorrect.  Mortgages do account for the length of the loan.  And while an advertised APR can not account for an individual borrower's intent to prepay a loan, the basic calculations can be used by any borrower based on his/her own intent.  That is not a failing of the concept of APR.  Furthermore, lender rebates which are not passed on to the borrower have no bearing on the borrower's rates.  Money out is money out.  The rate they "qualify for" is irrelevant to the calculation of what they will pay.
# The second sentence comes across more as a spam link than as proper encyclopedic content.  The Lender Police article was properly speedy-deleted back in July for a failure to meet even the minimum standards of an assertion of notability.  All sources about this organization that I can find are self-published (their own website or republication of press releases, for example).  The algorithm described is also not independently sourcable that I can find.  It certainly doesn't seem to have attracted any attention beyond the company itself.
I am removing the paragraph from the page pending discussion here.  Rossami (talk) 23:31, 27 August 2008 (UTC)
replies: text: I was planning on removing that section too.  See below... Sentriclecub (talk) 15:44, 18 September 2008 (UTC)
thread_title:  Disputed section 

message: ===Content Issues===
I'm doing a clean-thru and over the next few weeks, will tackle a couple paragraphs at a time, and will delete unsourced stuff which is bad for the article (the stuff which I believe warrants the two tags at the top of the article that say this article may be confusing or unclear). 
I have already tackled and finished everything above the Contents_Box.  I plan to use a different formula than this one...
p = \cfrac{P_0*r^{(n+1)}}{\sum_{l=1}^n r^l} 
because its not the best one for APR, as it is not 100% relevant.  There is a better equation which I plan to substitute.
The "Failings" dominates the article and is 50% of the article on my screen resolution.  I'll condense it to 3 well written, clear paragraphs (I too believe strongly in the content, i'm not defending APR, I actually have an issue that APR depends on the number of periods e.g. daily, monthly, biyearly).  Also i'll keep that table, as it makes some very good points.
I plan on making a section purely devoted to UK style APR, instead of merging the two articles (as they are now) and trying to make them explained every other sentence.  They are so core different, that it's easier to explain the US version one time, then make a section on the UK version.  (may sound unglobal, but you'll see it's one of the reasons why the article is bad, its like talking about the Tampa Bay bucaneers and the Tampa Bay Devil rays, all in the same article, one section at a time, and trying to make it "flow" well in style, which is impossible.  Just because the UK APR and US APR differ by only one letter, they are about as dissimilar as the two different sports teams. 
I plan on cutting down all stuff about other types of rates.  Let them be explained on their own page (main article... template).
===Style issues===
Seems like many different editors took turns submitting paragraphs.  Look at the top two paragraphs, how I idealized the style, and texture of the should-be article.
Length
I think ideally the article should be much smaller than its current size.
::"In the U.S., the calculation and disclosure of APR is governed by the Truth in Lending Act (also known as Regulation Z). In general, APR in the United States is expressed as the periodic interest rate times the number of compounding periods in a yearhttp://www.uncdf.org/mfdl/readings/EIR_Tucker.pdf Tucker, William R. "Effective Interest Rate," Paper, Bankakademie Micro Banking Competence Center, 5-6 September 2000. (also known as the nominal interest rate); since the APR must include certain non-interest charges and fees, however, it requires more detailed calculation."
This section of the article does not belong at the bottom of the article, but rather towards the top or maybe I'll incorporate it into the intro. These are just after a 10 minute brainstorming.  Ideally, I'm going to print the article, and use red-ink like marking up a poorly written essay by a classmate who procrastinated an assignment to write a wikipedia article and did it all the night before.  Ideally guys and gals, I'm going to simulate that I'm on the tv show The Apprentice and I dont want to get fired, and my assignment is to fix this article.  Collaborators, please drop me a note on my talk page (I work very slow, if left to do this alone) Sentriclecub (talk) 16:05, 18 September 2008 (UTC)
thread_title:  Ok, speak now or your content will be deleted 

message: Seems like many different editors took turns submitting paragraphs.  Look at the top two paragraphs, how I idealized the style, and texture of the should-be article.
Length
I think ideally the article should be much smaller than its current size.
::"In the U.S., the calculation and disclosure of APR is governed by the Truth in Lending Act (also known as Regulation Z). In general, APR in the United States is expressed as the periodic interest rate times the number of compounding periods in a yearhttp://www.uncdf.org/mfdl/readings/EIR_Tucker.pdf Tucker, William R. "Effective Interest Rate," Paper, Bankakademie Micro Banking Competence Center, 5-6 September 2000. (also known as the nominal interest rate); since the APR must include certain non-interest charges and fees, however, it requires more detailed calculation."
This section of the article does not belong at the bottom of the article, but rather towards the top or maybe I'll incorporate it into the intro. These are just after a 10 minute brainstorming.  Ideally, I'm going to print the article, and use red-ink like marking up a poorly written essay by a classmate who procrastinated an assignment to write a wikipedia article and did it all the night before.  Ideally guys and gals, I'm going to simulate that I'm on the tv show The Apprentice and I dont want to get fired, and my assignment is to fix this article.  Collaborators, please drop me a note on my talk page (I work very slow, if left to do this alone) Sentriclecub (talk) 16:05, 18 September 2008 (UTC)
thread_title: Style issues

message: 14-Nov-2008: I have added subheaders above as "Topics from 2004" (etc.) to emphasize the dates of topics in the talk-page. Older topics might still apply, but using the year headers helps to focus on more current issues as well. The topic-year boundaries were located by searching from bottom for the prior year#. Afterward, I dated/named unsigned comments & cut auto-signature comments.
Then I added "Talk-page subpages" beside the TOC. -Wikid77 (talk) 13:44, 14 November 2008 (UTC)
thread_title: Retrofit topic year headers/subpages

message: 14-Nov-2008: I have archived 7 older topics (49%) into new archive page "Talk:Annual percentage rate/Archive_prior_talk"
listed under "Talk-page subpages" at top (near TOC). -Wikid77 (talk) 15:49, 14 November 2008 (UTC)
thread_title: Archived 2004 to mid-2006

message: Due to its AfD resulting in a not-delete, I've merged money factor into this article. It's a very rudimentary merge (essentially a cut-and-paste, and some minor changes) so any help on cleaning up this section would be amazing. flaminglawyerc 01:51, 15 January 2009 (UTC)
thread_title:  Money factor 

message: My experience has been that if you offset costs with negative points, taking a higher interest rate, the APR still includes the standard closing costs even though those costs are being paid by the lender.  One would expect that if I had no closing costs at all, the APR would be equal to the interest rate (absent prepaid interest for partial months, or the like), but I noticed that the difference between APR and interest rate was the same as between an interest rate at zero points and its APR.  Ex.  3% rate, $2200 cost, 3.125 APR | 3.5% rate, $300 cost, 3.625 APR.  Is this just another instance of how APR fails to compare rates correctly, and should that be included in the article (or is it already and I'm just not seeing it?) 99.186.225.51 (talk) 18:08, 9 January 2012 (UTC)
thread_title:  Doesn't include negative points 

message: Just reading over this I am not sure if the math is accurate, unless it is an issue with windows calculator and trailing decimals. Using the 'common credit card quotes at 12.99% APR compounded monthly, the one year EAR is ((1 + 0.129949/12)^12) - 1, or 14.7975%.  I get .1379750 or 13.7975%.  Then for a 42.99% APR compounded daily, using the above formula replacing the changed values of ((1 + .429949/365)^365)-1 I get .53679 or 53.67%, a far cry from the 13.87% listed there and counter to it's original purpose of showing an increased APR % with different compounded period of having a higher 'true cost'.  I don't believe the issue is with my calculator as I do come up with the same values for the 29.99% compounded monthly. ~Edit forgot to sign 65.51.196.34 (talk) 19:01, 15 February 2012 (UTC)
thread_title:  Math in Nominal APR Does not... 

message: I am having trouble wrapping my head around the statement: 
:If the consumer pays the loan off early, the effective interest rate achieved will be significantly higher than the APR initially calculated.
This seems like the inverse.  If I have a loan for N periods, and I pay it off after only a single period, I only pay interest for one period.  For example if we use the example in the picture at the top of the page; if I have a loan for $100, with $10 in fees and pay it off in a single month, you will pay the $100 loan amount, the $10 fee, and $5.50 in interest (5% of the balance).  This leads to a payment of $115.50 or $15.50 more than the loan amount.  Using the equation from the image, Effective APR = (interest + fees) / loanAmt ==> Effective APR = 15.50/100 = 0.155 = 15.5% which is much less then the 49% shown in the image.  If the formula in the box is correct, than this make the statement about rate being higher being incorrect.  
Overall this page feels poorly written, and contradictory and could use the help of an expert, or at least someone with a decent text book.  — Preceding unsigned comment added by 140.252.14.13 (talk) 22:46, 27 February 2012 (UTC)
replies: text: The 15.5% interest you calculated above is a monthly interest (since you are paying off the loan in a single month).  To annualize that rate, you must multiply by 12 for an effective annual rate of 186%.  Rossami (talk) 02:27, 28 February 2012 (UTC)
thread_title:  Dependance on loan period 

message: I find the overall quality of this article on APR to be very low.  The main issues are (1) it is predominately written from the perspective of US residential real estate lending, and this unnecessarily complicates the whole article and (2) it is just very porrly written.
It is possible, and it should be done, to define APR ignoring fees as just the annual simle interest rate.  This is the way it is normally defined in basic finance textbooks.  Then, if you want to include fees into the caculation then this should be done specifically in a discussion of how APR is caclualted for residential mortgages in the US, which also involves a discussion of the regulation.  — Preceding unsigned comment added by 68.51.78.9 (talk) 16:55, 23 March 2012 (UTC)
replies: text: No, it is not possible because APR is not the same as the annual simple interest rate.  US residential real estate loans are one example but the concept applies to any loan with non-unitary duration and fees.  Having said that, if you think you can improve it, be bold and make some edits.  Rossami (talk) 20:54, 23 March 2012 (UTC)
replies: text: You are right, 68.51.78.9. More work is needed. I renamed the "Failings" section which seems to speak about USA only (only that country is mentioned and none of that applies to EU) and moved it to the bottom together with the section on rate format which also seems to apply to some country only but who knows which. I also rearranged or removed some other confusing content and slightly updated the EU section. --Nemo 10:03, 28 September 2013 (UTC)
thread_title:  Quality of this Article 

message: There is an article for annual percentage yield - equivalently, effective annual rate - which should be linked to in this article. Maybe, the two concepts APR and APY should be separated. The into is not clear.  — Preceding unsigned comment added by 137.132.3.10 (talk) 02:23, 30 September 2012 (UTC)
thread_title:  Separation of APR and APY 

message: In the section "Multiple definitions of effective APR" there is the following example:
"For example, consider a $100 loan which must be repaid after one month, plus 5%, plus a $10 fee. If the fee is not considered, this loan has an effective APR of approximately 80% (1.0512 = 1.7959, which is approximately an 80% increase). If the $10 fee were considered, the monthly interest increases by 10% ($10/$100), and the effective APR becomes approximately 435% (1.1512 = 5.3503, which equals a 435% increase). Hence there are at least two possible "effective APRs": 80% and 435%. Laws vary as to whether fees must be included in APR calculations."
The math is not totally correct. If the $10 fee were considered as well, it would be 100 ( 1 + .05) ^ 12 which is about $179.59, minus the principal ($100), plus the $10 fee. So the amount paid would be about 89 dollars on top of the 100 borrowed. Therefore it would be 89% APR. 
The statement  "If the $10 fee were considered, the monthly interest increases by 10% ($10/$100), and the effective APR becomes approximately 435% (1.1512 = 5.3503, which equals a 435% increase)." is totally bogus and doesn't make any sense. 
The figure is incorrect because it follows the example, so instead of 39 dollars of compound interest it should be 79 dollars + the 10 dollar loan fee.  — Preceding unsigned comment added by 2601:9:2A80:1BE:A409:F133:E0E1:F6BB (talk) 22:37, 17 April 2014 (UTC)
replies: text:  In the figure, the value of the loan starts decreasing after the first month, i.e. it is not $100 for the whole year. --Petteri Aimonen (talk) 08:07, 19 April 2014 (UTC)
thread_title:  The Loan Figure Payment is Incorrect 

message: It is clear that this term - the Wikipedia article and the comments outrageously evidence it itself even more - is in fact more confusing, misleading and deceitful than minimally helpful, as it is in general everything related to finance and the financial services industry. This indeed should be object of study (and of attention to Wikipedia) as well as all the legal loopholes, which always benefit (and lag behind) the corporations doing lucrative business from it.  — Preceding unsigned comment added by 90.244.15.8 (talk) 13:50, 3 November 2014 (UTC)
thread_title:  Misleading Confusion  

message: Which is best for me as a borrower;  APR 35.6%  APR 603%  APR 1264%  Papa.kirana@hotmail.com   82.43.161.235 (talk) 10:09, 21 April 2015 (UTC)
thread_title:  Best APR on TV 

message: This article is linked to a Wikidata element with interwikis. Why does that have no effect on the article's page (no link to Wikidata, no interwikis)? --AVRS (talk) 08:37, 4 February 2016 (UTC)
thread_title:  Wikidata 

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message: In the section "Nominal APR dies not reflect...", the parenthetical note "(see ~credit card interest~ for the .000049 addition to the 12.99% APR)." doesn't actually explain anything, and the credit card interest page does not explain this percentage point discrepancy at all, as of today's date. Does anyone have an alternate, steady, source for this math? Trumblej1986 (talk) 19:01, 29 May 2019 (UTC)
thread_title:  Alternate source for cited info? 

message: @Monica (my virtual assistant) 2600:6C40:6F0:A260:CDCE:7419:BB10:93FD (talk) 14:09, 11 July 2023 (UTC)
thread_title:  Project loone