APR is calculated by multiplying the periodic interest rate by the number of periods in a year in which it was applied . It does not indicate how many times the rate is actually applied to the balance.
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Subtract the amount borrowed from the total payment amount to find the loan’s total interest payments. Divide the total interest charges by the number of years on the loan to find the yearly interest amount. Divide the yearly interest amount by the total payments to calculate APR.
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