Question

Kimberly took out a payday loan for $1500 due in 4 weeks that charged a $135 fee. What is the periodic interest rate of the loan?

9%
468%
36%
117%

Answer 1

The periodic interest rate of the loan is 9 %.

Explanation:

Given,

The amount of loan = $ 1500,

Interest per period = $ 135,

Hence, the periodic interest rate of the loan

`=\frac{\text{Interest per period}}{\text{The amount of loan}}* 100`

`=(135)/(1500)* 100`

`=(13500)/(1500)`

`=9\%`

First option is correct.