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APR Formula
by Andy Zavoina, BOL Guru
BIO AND CONTACT INFO
Question: We would like to set up a Excel spreadsheet that calculates our APR for each of our products. Therefore, we are looking for a formula that calculates the APR that we could put into Excel and print out for everyone's use. We have calculators and software that calculate the APR but we are looking for the actual formula.
Answer: The cheap answer is to look at appendix J of Reg. Z for closed end, as an example. The appendixes have what you want. But cheap is not easy. While this is doable, it is better done by someone who truly understands all of the implications and assumptions that must be made in these formulas.
I had a hard time with the Fed calendar and never took the time to go farther.
I would refer you to someone like Richard Insley and APR Systems so that what you get is absolutely correct. He can custom build what you would need. Doing this yourself would require extensive testing. Done wrong and discovered a year later, you'd have a lot of potential errors.
First published on BankersOnline.com 04/14/03
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