Hi Calvin,

If I understand correctly, Florida defines the maximum interest APR that can be charged for a vehicle. Since weekly payments will yield less interest than monthly payments at the same rate, Florida says you can exceed the maximum stated rate, but only to the point where you receive the same amount of interest as you would from monthly payments. Is that correct?

If so, to determine the equivalent APR, I would calculate the total interest on the loan using monthly payments, then use that to figure out the APR for weekly payments. If you charged 17% APR using monthly payments, then you should come back with a slightly higher APR using weekly payments to earn the same amount of interest. Unfortunately, APR is the hardest of the variables in the equation to solve. Here is some code I use to calculate an APR from other variables. It uses payment amount instead of total interest, but you should be able to modify it according to your needs. I'm sure it could be optimized as well:

* Calculate APR (interest rate) from other payment terms
Lparameters lnAmtFinan, lnPayment, lnNumPayments
Local lnIntRate, lnInstallmentPeriod

* Iterate through possibilities (slow)
For lnIntRate = 0 to 1 Step .000001
	If Payment(lnAmtFinan, lnIntRate, lnNumPayments) >= lnPayment
		Exit
	EndIf 
EndFor 

* Determine number of periods in year
lnInstallmentPeriod = At(Contract.PyMeth,"AS-Q")
If lnInstallmentPeriod = 0
	lnInstallmentPeriod = 12	&& default to monthly
EndIf 

* Return as annual percentage
Return (lnIntRate * lnInstallmentPeriod * 100)

>Florida law states that the maximum interest rates that can be charged on the sale of vehicles as an add on interest rate dependent on the age of the car. In order to verify that a dealer is not exceeding this add on rate, a check must be performed by converting the applicable add on rate to an APR. The resulting apr will vary by the term of the loan in a nonlinear way. So far this is OK, if not a little bit too complex for a normal person to follow without the aid of the computer. The law further states that for 'irregular installment payments' the finance charge may be at a rate which will provide the 'same yield' as provided on monthly contracts. The state department of banking and finance defines weekly, biweekly and semimonthly payments as 'irregular' and fines any dealers who have finance charges more that $1.00 out of line with their figures. They will not release the methodology they use to come up with the 'same yield' formula. I am currently doing some figuring that keeps my
>dealers in compliance but it chunky,inelegant, and a support nightmare.
>
>An add on rate of 17% on a monthly loan will result in $17.00 of interest per $100.00 of principal for each year of the loan. The equivalent APR will also result in $17.00 of interest for each year of the loan. The 'same yield' that the State of Florida wants results in less than $17.00 per year and a different APR when the loan is on a weekly basis.
>
>Can anyone provide me with a formula to determine 'same yield' APR on the same principal amount but with different payment intervals ( 1 monthly the other weekly) over the same loan period. At this point I know two things for certain. 1= Coming up with an APR that will result in the same Finance charges is incorrect. 2= Using the formula for determining effective annual return (EAR) does not work either.