Suppose you need some fast cash until payday which is two weeks away. You decide to take out a payday loan for $400 with a fee o

Question

2 years ago

6

f $52. What is the APR on the loan?
APR-i(365 n)
0.339%
3.39%
33.9%
339%

1 answer:

MA_775_DIABLO [31] · Answer 1 · 2023-04-08T19:04:22+03:00

The APR on the loan will be $13. The APR is found by the standard formula. It is calculated annually.

APR is an annualized cost indication for a loan that includes all costs.

Suppose there is an initial amount as P. The interest, or say charge on it, is applied annually as 'C' amount.

The given data in the problem is;

Loan payment = $400

Fees = $52

APR=?

The value of the APR is found as;

$APR = \dfrac{C}{P} \times 100 \\\\\ APR = \dfrac{52}{400} \times 100 \\\\\ APR = \$ \ 13$

Hence, the APR on the loan will be $13.

To learn more about the APR, refer to the link;

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