Calculate APR (annual percentage rate) Programmatically
I suppose you want to compute X
from your equation. This equation can be written as
f(y) = y + y**2 + y**3 + ... + y**N - L/P = 0
where
X = APR
L = Loan (6000)
P = Individual Payment (274.11)
N = Number of payments (24)
F = Frequency (12 per year)
y = 1 / ((1 + X)**(1/F)) (substitution to simplify the equation)
Now, you need to solve the equation f(y) = 0
to get y
. This can be done e.g. using the Newton's iteration (pseudo-code):
y = 1 (some plausible initial value)
repeat
dy = - f(y) / f'(y)
y += dy
until abs(dy) < eps
The derivative is:
f'(y) = 1 + 2*y + 3*y**2 + ... + N*y**(N-1)
You would compute f(y)
and f'(y)
using the Horner rule for polynomials to avoid the exponentiation. The derivative can be likely approximated by some few first terms. After you find y
, you get x
:
x = y**(-F) - 1