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?

Answer 1

Answer: D. 321%

Explanation: got it right on EDGE

Answer 2

APR = 321.146%

Step-by-step explanation:

Fees in dollars = $130

Amount of refund = $985

Duration of loan = 15 days

Number of "15-days" in a year assuming 365 days a year = 365/15 =24.333

15 days' fees as a percentage of the refund =
`(130)/(985) *100\\ \\ =0.1319797 *100\\ \\ =13.19797%`

Therefore since we determined above that in a year we have a total of 24.333 "15-days" ,

Annual percentage rate (APR) = 24.333 * 13.19797%

APR = 321.146%