The first step to calculate the APR is to calculate the interest rate per $100
Here Interest rate = 11%
Term or time of repayment = 18 months
interest per $100 =
$100 × 11% ×
= $16.50
Now we should calculate the interest part for $3400 for 18 months
×
= $31.12
So $ 31.17 is the interest part of the repayment amount
Now lets calculate the principal part which would be $ 3400 divided equally for 18 months
Now to find the final payment we add the interest and the principal part
$31.17+$188.89 = $220.06
Hence option D is the right answer