Why monthly present in on line monthly payment calculator calculated as annual percent divided by 12? I think it's wrong, it should be exponential. For instance annual percent 4%. To calculate monthly percent we need to 1.04^(1/12). So monthly percent should be 0.327%, but if we use approach on on line calculators it is going to be 0.333.
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Basically the way that APR is calculated varies depending on the industry and who quoted it. On a car they calculate the APR by taking the monthly percent and multiplying by 12, the calculator is actually right.
You probably want to calculate APY (annual percentage yield). Check this article out: http://www.finweb.com/loans/how-do-they-calculate-your-car-loan-apr.html#axzz3lTowC0op
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$\begingroup$ looks like a way to fool people. When I was talking with bank it was annual percent, for my car it was 10%. And then it magically converted to 0.83% APR. $\endgroup$– antonteCommented Sep 13, 2015 at 2:23
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$\begingroup$ Witch is actually 10.47%. And now my mortgage bank suggesting me be-weekly payments. And I afraid whey will calculate new APR as my annual percent divided by 26. In my case 4%/26. Witch is translated to 4.077% comparing with 4.074% monthly APR. $\endgroup$– antonteCommented Sep 13, 2015 at 2:30