The annual percentage rate of the loan is approximately 913%. option c is correct.
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;
[tex]\rm r = \frac{final \ value}{initial \ value } -1 \\\ \rm r = \frac{f 90}{75 } -1 \\\\ r=0.20 \\\\[/tex]
If the rate of interest is 20% then the annually the rate is obtained as;
[tex]\rm r_{annual}= \frac{0.20}{8 \ days} \times \frac{365}{1 \ year} \\\\ \rm r_{annual}=913 /year[/tex]
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;
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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
