Questions and Answers
Can you give me a formula for calculating the Annual Percentage Rate on a real estate loan? I have used the APR calculations provided in the manual for my financial calculator but the results don't match the APR calculated by our loan software on the Truth in lending disclosure, even though I am using the same prepaid finance charges in my calculation.
The formula for calculating the APR in closed-end credit is found in Appendix J to Regulation Z.
Some factors that can cause the APR to change are:
- Rounding differences
- Differences in accrual method (e.g., 30/360, actual/365, etc.)
- Differences in the method of counting days
