Ten thousand yuan is five yuan a day, and so on, 365 days a year, which is 1825 yuan. 1825 ÷10000 = 0.1825, equal to 18.25%.

This is 10000 yuan, 5 yuan every day, and the converted annual interest rate is 18.25%.

This is a conversion, not a real loan of 10 thousand yuan, and the annual repayment amount is much more than 1825 yuan. If there is nothing that can be borrowed for one year, it must be overdue and there will be a penalty interest. There will be a handling fee for installment payment. There are many other expenses, which will not be described here.

How to calculate the real annualized interest rate of credit cards?

For example, if you borrow 12000 yuan from a certain platform, the total interest of 12 months is 970.69 yuan. According to general understanding, the annualized interest rate is 970.69/12000×100% = 8.1%.

But in fact, this 12000 yuan is not paid off in one lump sum at the end of the year, but you pay back more than 1000 yuan every month. In other words, you actually only account for 12000 yuan in the first month, and then it will decrease month by month.

So interest can't be divided by the general annualized interest rate! As for the real annualized interest rate, it needs a complicated formula and a complicated calculation process! Of course, you can also use the irr function of excel table (if you want to know, we will introduce it in two minutes).

A simpler method is recommended here, that is, the actual annualized interest rate can be roughly estimated by using a formula: actual annualized interest rate = nominal annualized interest rate ×2- 1.

For example, the loan mentioned above is easy to calculate, and the actual annualized interest rate is 8.1%× 2-1=15.1%.

Similarly, the credit card is divided into 12 installments, and the handling fee for each installment is 0.5%. On the surface, the annualized interest rate is 0.5% × 12 = 6%, while the actual annualized interest rate is about 1 1%.