# Consumer Credit Act 1995

F226[FOURTH SCHEDULE

*APR - METHOD OF CALCULATION*

**THE BASIC EQUATION EXPRESSING THE EQUIVALENCE OF LOANS ON THE ONE HAND AND REPAYMENTS
AND CHARGES ON THE OTHER**

Meaning of letters and symbols:

K is the number of a loan

K’ is the number of a repayment or a payment of charges

A_{k} is the amount of loan number K

A’_{k’} is the amount of repayment number K’

∑ represents a sum

m is the number of the last loan

m’ is the number of the last repayment or payment of charges

tk is the interval, expressed in years and fractions of a year, between the date of loan No. 1 and those of subsequent loans Nos 2 to m

tk’ is the interval, expressed in years and fractions of a year, between the date of loan No. 1 and those of repayments or payments of charges Nos 1 to m’

*i* is the percentage rate that can be calculated (either by algegra, by successive approximations,
or by a computer programme) where the other terms in the equation are known from the
contract or otherwise.

*Remarks:*

(*a*) The amounts paid by both parties at different times shall not necessarily be equal
and shall not necessarily be paid at equal intervals.

(*b*) The starting date shall be that of the first loan.

(*c*) Intervals between dates used in the calculations shall be expressed in years or
in fractions of a year. A year is presumed to have 365 days or 365,25 days or (for
leap years) 366 days, 52 weeks or 12 equal months. An equal month is presumed to have
30,41666 days (i.e. 365/12).

(d) The result of the calculation shall be expressed with an accuracy of at least one decimal place. When rounding to a particular decimal place the following rule shall apply:

If the figure at the decimal place following this particular decimal place is greater than or equal to 5, the figure at this particular decimal place shall be increased by one.

(*e*) Member States shall provide that the methods of resolution applicable give a result
equal to that of the examples presented in Annex III. ]

**Annotations**

**Amendments:**

F226

Substituted (20.09.2000) by *European Communities (Consumer
Credit) Regulations 2000* (S.I. No. 294 of 2000), reg. 5 and Table part
2.