Help with some business math, please!

[Jesda]

I'm pulling (what remains) of my hair out over a dispute with a finance company over what a customer's rate and payment should be.

We agreed to a sale price of: $7644 (includes a $149 fee)
The APR is: 8.99%
Payment term: 48 months

The calculated payment is $190.18.

Here are my calculations:

P(r/12)
----------------- = Monthly Payment
(1-(1+r/12)^-m)

P = 7644 Principal
m = 48 mo
r = .0899 rate

7644 (.0899/12)
7644 (0.0074916666666667)
57.2663
-------------
(1 - (1+.0899/12)^-48)
(1 - (1+.0899/12)^-48)
(1 - (1+0.0074916666666667)^-48)
(1 - (1.007491666666667)^-48)
(1 - 0.69889155748984983570555932930942)
0.30110844251015016429444067069058

=190.18496964949626515943471220465


The lender claims that the payment I came up with results in an APR of 8.8108% instead of 8.99% when they punched it into Oracle Daybreak.


What the hell is going on?

[frapjap]

I'm pulling (what remains) of my hair out over a dispute with a finance company over what a customer's rate and payment should be.

We agreed to a sale price of: $7644 (includes a $149 fee)
The APR is: 8.99%
Payment term: 48 months

The calculated payment is $190.18.

Here are my calculations:

P(r/12)
----------------- = Monthly Payment
(1-(1+r/12)^-m)

P = 7644 Principal
m = 48 mo
r = .0899 rate

7644 (.0899/12)
7644 (0.0074916666666667)
57.2663
-------------
(1 - (1+.0899/12)^-48)
(1 - (1+.0899/12)^-48)
(1 - (1+0.0074916666666667)^-48)
(1 - (1.007491666666667)^-48)
(1 - 0.69889155748984983570555932930942)
0.30110844251015016429444067069058

=190.18496964949626515943471220465


The lender claims that the payment I came up with results in an APR of 8.8108% instead of 8.99% when they punched it into Oracle Daybreak.


What the hell is going on?

[sx moneypit]

[frapjap]

I'm pulling (what remains) of my hair out over a dispute with a finance company over what a customer's rate and payment should be.

We agreed to a sale price of: $7644 (includes a $149 fee)
The APR is: 8.99%
Payment term: 48 months

The calculated payment is $190.18.

Here are my calculations:

P(r/12)
----------------- = Monthly Payment
(1-(1+r/12)^-m)

P = 7644 Principal
m = 48 mo
r = .0899 rate

7644 (.0899/12)
7644 (0.0074916666666667)
57.2663
-------------
(1 - (1+.0899/12)^-48)
(1 - (1+.0899/12)^-48)
(1 - (1+0.0074916666666667)^-48)
(1 - (1.007491666666667)^-48)
(1 - 0.69889155748984983570555932930942)
0.30110844251015016429444067069058

=190.18496964949626515943471220465


The lender claims that the payment I came up with results in an APR of 8.8108% instead of 8.99% when they punched it into Oracle Daybreak.


What the hell is going on?

[the converted]

I punched it into this website and got the same number you have. http://www.bankrate.com/calculators/mor ... lator.aspx I'm not an expert on the oracle software, but maybe there's cross up between apr and apy? Either way, you're right, and they are probably porking all of their customers.

[Mr. Music]

I also get the same $190.18 figure from running the calculation in Excel and a loan calculator app on my phone. Maybe the lending company is adding some extra fee or tax that is resulting in the difference.

[Rogue One]

I'm pulling (what remains) of my hair out over a dispute with a finance company over what a customer's rate and payment should be.

The lender claims that the payment I came up with results in an APR of 8.8108% instead of 8.99% when they punched it into Oracle Daybreak.

What the hell is going on?

They're using Enron math. Your figures are correct.

Loan Balance: $7,644.00
Loan Interest Rate: 8.99%
Loan Term: 4 years
Minimum Payment: $0.00

Monthly Loan Payment: $190.18
Number of Payments: 48

Cumulative Payments: $9,128.93
Total Interest Paid: $1,484.93

Note: The monthly loan payment was calculated at 47 payments of $190.18 plus a final payment of $190.47.

[95_240]

My fancy pants calculator says you're right with 190.18. Their claim would result in a payment of 189.54.

[Jesda]

You ever feel like you're the only sane person in a room full of people telling you you're nuts?

That was me all week dealing with this problem.

GRRRR.

[Rogue One]

You ever feel like you're the only sane person in a room full of people telling you you're nuts?

That was me all week dealing with this problem.

GRRRR.

Half the world is composed of idiots, the other half of people clever enough to take indecent advantage of them. - Walter Kerr

In the kingdom of the blind, the one-eyed man is king. - Desiderius Erasmus

[Jesda]

Supposedly "this has never happened before" and their system outright rejected the interest rate THEY quoted me for reasons they don't understand. And I get to redo the contract AGAIN$%@#$^#%^& (at a slightly lower rate at least) and drive across state lines to get the customer to sign it so I can fax it over.

[darylzero]

Supposedly "this has never happened before" and their system outright rejected the interest rate THEY quoted me for reasons they don't understand. And I get to redo the contract AGAIN$%@#$^#%^& (at a slightly lower rate at least) and drive across state lines to get the customer to sign it so I can fax it over.

You should tell a news company about this or tell a lawyer to file a class action lawsuit and tell him you want a %20 finders fee.
They are obviously screwing people over.

[Jesda]

Since they rely on the dealer to put together initial calculations (they had to finally reduce the rate to get "the system" to "accept" it), I don't see any solid proof of intentional or institutional fraud.

I do, however, see an entire staff of bankers who pushed the blame back on me despite my repeatedly insisting that they whip out their calculators and grind out the numbers the old fashioned way. I would show them my formulas and results and they'd simply spit back "Our system says its wrong"

Well, question your effing system and use your god damned brains!

[hannibal]

They must be using compound interest in Daybreak. APR and APY (yield) are the same with simple interest. But APY accounts for compound interest while APR doesn't. An APR of 8.8108% will have an APY of ~8.99% with biannual compounding.

[Conner]

Hannibal is right. I get $190.18 using the PMT function in Excel. This is the difference between APR and EAR (effective annual rate). Your lender doesn't understand the difference apparently.

[MinisterofDOOM]

You ever feel like you're the only sane person in a room full of people telling you you're nuts?

Yes. Anytime I'm out in public. Which is why I avoid it.