The Annual Percentage Rate (APR) is the cost of the credit extended to the consumer by the bank. This rate is usually higher than the profit rate (Flat Rate) as it takes into consideration all costs featured in extending that credit namely administrative fees, commission, and insurance cost. Therefore, APR provides a clearer picture of the cost of credit than profit rate.
The table below and its numbers are an illustrative example only to show the annual percentage rate, which is dependent on four variables (Finance amount, profit rate, Finance tenor and car price):
Example of Calculating the Annual Percentage Rate
|Asset Type||Finance Amount||Finance Duration||APR||Monthly Repayment||Balloon Payment|