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Repayments are calculated using the standard annuity formula:

P = rC / (1 – (1 +r)-n)


P = repayment amount
r = interest rate per period as a decimal, (eg: 2% = 0.02)
C = Current loan amount
n = number or repayments

However, there are two methods of calculating the interest rate per period. The simple method is to divide the APR by the number of periods per year. The alternative is to use effective APR.

Calculating Effective APR