Based on period interest rate, number of periods, and loan amount, this function calculates the compound annual interest rate of the loan based on the monthly repayment. It calculates based on a fixed interest rate, FV=0, and charging is at the end of the period.
APR(nper, pmt, pv, fv = 0)
| nper | Number of periods - monthly |
|---|---|
| pmt | Instalment per period (should be negative) |
| pv | Present value i.e. loan advance (should be positive) |
| fv | Future value i.e. redemption amount |
rate The effective interest rate per year
# single set of values APR(12,-10,110)#> [1] 0.1766147# vector of values df<-data.frame(nper=c(12,24),pmt=c(-10,-10),pv=c(110,220)) APR(df$nper,df$pmt,df$pv)#> [1] 0.17661471 0.08835847