Question

If an 18-day single payment loan has a periodic interest rate of 9.6%, what is the approximate APR of the loan? Show your work.

Answer 1

Answer:

$\text{APR}\approx 194.7\%$

Step-by-step explanation:

We have been given that an 18-day single payment loan has a periodic interest rate of 9.6%.

To solve our given problem, we will divide number of days in a year (365) by 18 and multiply by periodic interest rate.

$\text{APR}=\frac{365}{18}\times 9.6\%$

$\text{APR}=20.2777777\times 9.6\%$

$\text{APR}=194.66666\%$

$\text{APR}\approx 194.7\%$

Therefore, the APR of the loan would be approximately 194.7%.