US APR vs EU APR, and the Substitute Tax on Loan Effects on These Formulas

Abstract

This paper explores the theory, goals, outcomes and difficulties of consumer finance disclosure process, focusing mainly in the Substitute Tax (especially the Italian one) effects on EU APR vs US APR formula and the compound mechanism intrinsic subsistent in a constant mortgage for additional research and study, and a general technical analysis about IRR and EU/US APR relations.

In particular, this study demonstrates that the supposed equivalence of IRR formula with APR formula is definitively incorrect under many aspects and empiric chases, while the most used constant mortgage has a typical anatocism deriving from compound interest-quota in each installment.