Posted by PAW/FL on March 26, 2009, 5:46 pm, in reply to "Shouldn't Step 3 ..." This post is strictly the opinion of the author
24.26.7.45
--Previous Message--
: be the Amount Financed? Using the
: original loan amount would only give
: you the actual interest rate, not the
: APR.
No. It is correct using the amount borrowed, or the loan amount, which is the present value of the loan.
The RATE function is used to determine the corresponding rate necessary to produce a monthly payment of pmt on an original loan amount of pv.
Try it on your own loan and see what numbers you get. It should provide you with the APR as shown on the TIL (assuming that the actuarial method and formula are used).
The APR is calculated iteratively by solving the following equation using the Newton-Raphson method: 
where:
C = Loan Amount
P = Payment
N = No. of Months (term)
a = APR
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