I would like to know how APR is calculated. If I have $300 on a card and APR is 16.5% whats the amount?

Question

I would like to know how APR is calculated. If I have $300 on a card and APR is 16.5% whats the amount?

Answer 1

APR is the percentage of the amount owed that you would pay in interest over a one year period. So take 16.5% +the current prime and multiply that by the amount you owe and than divide that by 12 to figure out how much the interest would be. So $300 at 16.5% +prime (current is around 1.5%) would be around $52.50 in interest.

Answer 2

Credit cards compound daily. So basically, instead of dividing by 12, it is 365.

Answer 3

Furthermore, credit card calculate interest charges using daily balance.  

Take the daily balance * APR / 365 is the interest charge for that day.

Best wishes.