OT - calculating credit-card interest/APR

[Perry Smith]

I disagree that credit cards compound interest daily.  They have a 
daily rate but that is not the same.  You do not pay interest today 
that was charged to you as interest yesterday (which is daily 
compounding).


On Sep 22, 2004, at 5:33 AM, Jon Lapham wrote:

> jdebert wrote:
>> This calculator:
>>     http://www.credit-card-calculator.com/calculator.php
>> gives a result that seems like it's closer to what it should be.
>
> Huh?  To test the "credit-card-calculator" I put in a balance of 
> $10000 at an APR of 10% with a payoff time of 24 months.  It claims my 
> monthly payments should be $500, or a final payoff total of $12000.  
> Surely this is not correct.
>
> Using GnuCash's very own shiney Financial Calculator (under the Tools 
> menu) I set Payment Periods to 24, Interest Rate to 10, Present Value 
> to 10000, Future Value to 0, Compounding to Daily (365), Paments to 
> Monthly, End of Period Payments, and Discrete Compounding.  Clicking 
> on "Calculate" for Periodic Payment tells me the payoff amount should 
> be $461.64, for a payment total of $11079.36.  That sounds more 
> reasonable.
>
> The docs for the Financial Calculator are found in the "Loans" section 
> of the Concept Guide:
> http://www.gnucash.org/docs/v1.8/C/gnucash-guide/loans_calcs1.html
>
> -- 
> -**-*-*---*-*---*-*---*-----*-*-----*---*-*---*-----*-----*-*-----*---
>  Jon Lapham  <lapham at jandr.org>                Rio de Janeiro, Brasil
>  Personal: http://www.jandr.org/
> ***-*--*----*-------*------------*--------------------*---------------
>
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