Flat Rate to APR

From the book, Chapter 15. Flat interest = amount × flat rate × years, spread evenly over the payments. But you owe the full amount only in the first month, and about half of it on average, so the true rate is close to double the flat one. The APR here is the yearly rate that makes the same payments exactly repay the money you actually received, found by trial. Some countries compound an APR instead of multiplying the monthly rate by twelve, so the effective yearly rate is shown too.