Canny Yorkshire folk

[mobaholic]

A York man walks into a High Street bank & asks for a loan.
He tells the bank officer he is going to Australia on business for two weeks & needs to borrow £5,000.

The bank officer tells him that the bank will need some form of security for the loan, so the Yorkshire lad hands over the keys and documents of new Ferrari parked on the street in front of the bank.  He produces the Log Book & every thing checks out.
The loan officer agrees to accept the car as collateral for the loan.

The bank manager & its officers all enjoy a good laugh at the rough-looking Yorkshireman for using a £120,000 Ferrari as collateral against a £5000 loan.
The bank manager then instructs an employee of the bank to drive the Ferrari into the bank's underground garage, where he parks it.

Two weeks later, the man returns, repays the £5,000 & the interest of £15.41.
The bank officer says to the Yorkshireman, "Sir, we are very happy to have had your business, & this transaction has worked out very nicely, but we are a little puzzled...while you were away, we checked you out further & found that you are a multi-millionaire.
What puzzles us is, why would you bother to borrow "£5,000"?

The Yorkshireman replies: "Where else in York can I park my car for two weeks for only £15.41 & expect it to be there when I return?”
 
Ah, the mind of a true Yorkshireman...
This is why they survive.

[cartoon302]

Good ,Excellent

[delaro]

Not bad for a loan 
effective APR 8,0352142858%

[HiPD]

Please explain how you calculate that delaro.  £15.41 for 2 weeks is about £400.66 for a year, and £400.66 is about 8% of £5000.

[delaro]

£15.41 for 2 weeks is about £400.66 for a year, and £400.66 is about 8% of £5000.

I couldn't explain it better pal. He had a loan for a fortnight not the whole year. If he had had it he would have paid £400 interest.

Regards.

dlR

[HiPD]

When I learned maths, 8% wasn't 8,0352142858% !

So I must repeat my question: how did you make it 8,0352142858%?

[andy]

the comma has been used as a decimal point, as many Europeans do

http://en.wikipedia.org/wiki/Decimal_separator

[HiPD]

Well that's a very stupid way of writing a figure.  I couldn't understand why he didn't write it as 80,352,142,858%, nor how it could possibly be that big.

I am not even sure how ~ 8% could turn into 15 -16 % APR, but I admit I don't know how anyone calculates those!

[andy]

a flat 8% becomes close to 16% when it is a loan repaid in regular instalments

this is because effectively the average amount borrowed with respect to time is only about half the initial amount

[HiPD]

Ah that makes some sense!  Thank you for the explanation andy. 

[delaro]

the comma has been used as a decimal point, as many Europeans do

Thank you Andy! 8.0352142858%

Well that's a very stupid way of writing a figure.

With all respect HiPD I have to disappoint you - UK is not a World's Navel and people elsewhere tend to do things in different ways. Even if it comes to as simple things as writing figures.

I am not even sure how ~ 8% could turn into 15 -16 % APR, but I admit I don't know how anyone calculates those!

Perhaps you might wish to enlighten query by reading this.

[mobaholic]

Oh I wish I knew if I should intrude into this interesting debate or not !       

But let's give this a go !       

I actually disagree with all previous contributors, and as someone who is FPC qualified, and has Institute of Bankers' Exams as well, I suppose I need the courage to wade in.       

Firstly, I agree with HiPD: this is a UK forum, after all, so all our figures should be expressed in ways intelligible to UK readers.         

Secondly, I regret to say I disagree with andy: the premise of his reply is that this is a repayment loan: it isn't !  It is entirely an interest only loan, so 8% interest is an APR of ~ 8% !       

And finally, thank you to all contributors for a very stimulating debate, so far.       

[andy]

I didn't say it is a loan repaid in instalments, but explained why such a loan could simultaneously be described with 2 different interest rates

I did originally post 15.5 to 16 % however, but corrected myself, editing the post within a minute to omit it

[mobaholic]

I didn't say it is a loan repaid in instalments, but explained why such a loan could simultaneously be described with 2 different interest rates

I did originally post 15.5 to 16 % however, but corrected myself, editing the post within a minute to omit it

OK andy accepted.  HiPD quoted you, and I found your original comments in my email copy.  But I fully accept you corrected yourself in seconds.  Sorry.       

[petkow]

Well that's a very stupid way of writing a figure. 

Firstly, I agree with HiPD: this is a UK forum, after all, so all our figures should be expressed in ways intelligible to UK readers.         

Just appreciate for a second that most of its users are not from the UK. A little more tolerance to them will be warmly appreciated by them. MH, I simply cannot understand why by agreeing you also seem to be implying that it is OK to call other members here "stupid", or that their native numbering methods are "stupid"! Do you condone this?

After all, it doesn't take a genius, let alone someone who has passed Institute of Bankers' Exams to figure out what Delaro was meaning! Anybody who misreads 8,0352142858 as 80,352,142,858 and not as 8.0352142858 is doing so to make a mountain out of a molehill. After all, if Delaro was intending to present this in conventional UK numbering format, then where are the other commas which would be required! (As pointed out by yourself) i.e. to separate the 1000's, millions and billions? What would the isolated 8 in front of a comma even be referring to?

Just think about this. Can anyone even name me one type of economic factor where an APR of 80 trillion percent is even a feasible reality??

I think the figure as presented by Delaro is therefore completely intelligible to the average UK reader. If there was really a genuine misunderstanding (which I fail to understand), it should not lead to comments saying that this is a "stupid" way of presenting numbers, when a huge part of the world uses such a numbering system (myself included). On the contrary, not even knowing this, may be demonstrating just that word! 
 
And I'm not even the one who started turning this light-hearted thread onto its head for the sake of nit-picking!