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

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

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}=(365)/(18)* 9.6\%`

`\text{APR}=20.2777777* 9.6\%`

`\text{APR}=194.66666\%`

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

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