Question

Verona goes to a business that offers tax refund anticipation loans because she really wants to get her money right now and not wait. they calculate her refund to be $985 and charge her $130 in fees for the loan. if the term on her loan is 15 days, what is the annual percentage rate on her loan? a. 130% b. 184% c. 317% d. 321% please select the best answer from the choices provided a b c d

Answer 1

The annual percentage rate on the loan is 321%

Calculations and Parameters:

Using this formula

Annual percentage rate=(Fees/Refund)×(Numbers of days in a year/ Term of loan)

Annual percentage rate=(130/985)×(365 days/15 days)

Annual percentage rate=0.1319797×24.333×100

Annual percentage rate=321%

Therefore, the correct answer is option D.

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