<prompt> Human: After being in a massive rush to purchase a vehicle which I thankfully got for a great price and not looking over the paperwork for the loan through my bank I notice some discrepancies in the interest rate. So my loan is for 12,075 with an APR of 4.055 and a 3.75 interest rate; it is a 48 month loan and my payments are 271.69 a month. What has me confused is that if I pay that amount for 48 months, I pay a total interest rate of 7.95 963.72 of the principal. Is this correct? I feel lost and slightly taken advantage of...  <response>: APR is an ANNUAL percentage rate. You calculated a lifetime percentage rate.If you pay 4 of the principal in your first year, that doesnt mean you get to stop paying interest. You still have to pay interest on the remaining principal over the life of the loan. 