Annual percentage rate (APR) and effective APR발음듣기
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Annual percentage rate (APR) and effective APR
57문장
100% 한국어
번역 7명 참여
출처 : 칸아카데미
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[Voiceover] Easily the most quoted number people give you when they're publicizing information about their credit cards is the APR.발음듣기
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I think you might guess or you might already know that it stands for annual percentage rate.발음듣기
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What I want to do in this video is to understand a little bit more detail in what they actually mean by the annual percentage rate and do a little bit math to get the real or the mathematically or the effective annual percentage rate.발음듣기
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I was actually just browsing the web and I saw some credit card that had an annual percentage rate of 22.9% annual percentage rate, but then right next to it, they say that we have 0.06274% daily periodic rate, which, to me, this right here tells me that they compound the interest on your credit card balance on a daily basis and this is the amount that they compound.발음듣기
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Remember, this is a percent, but I'll just ignore the percent sign, so as a decimal, I would actually add two more zeros here, but .06274 x 365 is equal to, right on the money, 22.9%.발음듣기
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'"They're charging me .06274% per day, they're going to do that for 365 days a year, so that gives me 22.9%."발음듣기
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They're compounding this number on a daily basis, so if you were to give them $100 and if you didn't have to pay some type of a minimum balance and you just let that $100 ride for a year, you wouldn't just owe them $122.9.발음듣기
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If you watch the compounding interest video, you know that if you wanted to figure out how much total interest you would be paying over a total year, you would take this number, add it to 1, so we have 1., this thing over here, .0006274.발음듣기
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Instead of just taking this and multiplying it by 365, you take this number and you take it to the 365th power.발음듣기
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That's because if I have $1 in my balance, on day 2, I'm going to have to pay this much x $1.발음듣기
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On day 3, it'll be $1, which is the initial amount I borrowed, x 1.000, this number, 6274, that's just that there and then I'm going to have to pay that much interest on this whole thing again.발음듣기
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If I keep that balance for 365 days, I have to raise it to the 365th power and this is counting any kind of extra penalties or fees, so let's figure out -발음듣기
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Once I get this and I subtract 1 from it, that is the mathematically true, that is the effective annual percentage rate.발음듣기
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If I were to compound this much interest, .06% for 365 days, at the end of a year or 365 days, I would owe 1.257 x my original principle amount.발음듣기
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The effective APR, annual percentage rate, or the mathematically correct annual percentage rate here is 25.7%.발음듣기
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You might say, "Hey, Sal, that's still not too far off from the reported APR, where they just take this number and multiply by 365, instead of taking this number and taking it to the 365 power."발음듣기
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If you look at that compounding interest video, even the most basic one that I put out there, you'll see that every percentage point really, really, really matters, especially if you're going to carry these balances for a long period of time.발음듣기
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In general, you shouldn't carry any balances on your credit cards, because these are very high interest rates and you'll end up just paying interest on purchases you made many, many years ago and you've long ago lost all of the joy of that purchase.발음듣기
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I encourage you to not even keep balances, but if you do keep any balances, pay very close attention to this.발음듣기
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That 22.9% APR is still probably not the full effective interest rate, which might be closer to 26% in this example.발음듣기
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