Question

Barbara got a flat tire and does not have a spare. she needs her car for work, so she goes to a business that offers payday loans in order to get the money to buy a new tire. she borrows $75 and plans to pay it back when she gets paid in 8 days. barbara is charged a fee of $15 and the term on her loan is 8 days. approximately what is the annual percentage rate on her loan? a. 228% b. 487% c. 913% d. 973%

Answer 1

The annual percentage rate of the loan is approximately 913%. option c is correct.

What is the annual percentage?

The yearly interest earned by an amount charged to borrowers or paid to investors is referred to as the annual percentage rate.

APR is a percentage that indicates the real annual cost of money for a loan or investment over the period of the loan.

The amount borrowed =  $75

no of days =8 days

Fees charged = $15

The annual percentage is found as;

$\rm r = \frac{final \ value}{initial \ value } -1 \\\ \rm r = \frac{f 90}{75 } -1 \\\\ r=0.20$

If the rate of interest is  20% then the annually the rate is obtained as;

$\rm r_{annual}= \frac{0.20}{8 \ days} \times \frac{365}{1 \ year} \\\\ \rm r_{annual}=913 /year$

Hence the annual percentage rate of the loan is approximately 913%. option c is correct.

To learn more about the annual percentage refer to the link;

brainly.com/question/17613825

Answer 2

Answer:

C

Step-by-step explanation:

Barbara got a flat tire and does not have a spare. She needs her car for work, so she goes to a business that offers payday loans in order to get the money to buy a new tire.  She borrows $75 and plans to pay it back when she gets paid in 8 days. Barbara is charged a fee of $15 and the term on her loan is 8 days. Approximately what is the annual percentage rate on her loan?

a.

228%

b.

487%

c.

913%

d.

973%

C