Discount loan

sisiberova · #1 (**permalink**) 10-12-2007, 07:25 AM

For example I need $ 10 000. The bank will give me discount loan with 17% annual rate, for 1 year, with 1 payment at the end of the period. Number of periods are equal to 1, number of years are equal to 1 also. Please, help me, and advice, how it is calculated that I have to apply for $12 050 in order to get $10 002 loan, and the rate will be $ 2 049. How I should calculate these $ 12 050?
The effective annual intrest rate is 20.48%. Please advice how it is calculated.
Thank you in advance,
Silvia

sweeps · #2 (**permalink**) 10-12-2007, 02:21 PM

Well, I guess I'll be the first to say, "Huh?"

project15 · #3 (**permalink**) 10-12-2007, 04:45 PM

I fail to see the discount with this loan.

On another note. The APR could be at 17% and the actual APY could be at 20.48%, there is a difference. If I were you, I would stay away from this loan and any loan above 10% in today's interest market.