Find the Interest Rate

[AB]

Perhaps I'm being stupid...

Looking at a lease purchase and I've been given a rate of £60/£1000

Straight purchase cost is £7,267.

(£7,267 / 1,000) x 60 giving me £436.02 as a quarterly payment which stacks up with what I've been told.

Over 5 years, so 20 payments... £8,720.40 total repayable. So 1,453.40 is the total interest repayable across the term.

How do I turn this into an interest rate? Where does the £60/£1000 rate come from, it somehow knows it's being paid over 5 years.

Explain it to a simpleton, I'm not a financial brain and usually turn to websites and calculators for this sort of thing, which I have, but not without confusing me as I want an actual explanation rather than just the figures in this instance.

I could be having an off day and missing something obvious.

[AB]

I can do but I wanted to try and find out for myself.

How did you get to 7.4%? You are quite correct in that it is 7.4% according to the online calcs but other than that... I'm confused.

[AB]

It probably will be displayed if and when I get to the proposal stage, this is initial discussions and I didn't want to look stupid by asking about the rate, I wanted to go back and say x% are you taking the p*ss etc.

[AB]

Sheepshanks said:

The above assumes that it's just a normal loan, and there's nothing significant in your description of it as "lease purchase" which normally has a balloon (variable final payment) at the end.

Lease Purchase, £0 residual at the end and kit purchased for option fee of £1 at the end of the term.

Product is on the Energy Saving Technology List so ECA can be claimed on the payments this way. This is AIUI.

Reason I wanted to be able to calculate the interest rate myself is because it frustrates me that I don't know how to do it and I want to be able to do it!