Question

Mike Morgan has a $83,098.59 loan. He paid $1,000 in fees and $4,900 in total interest the first year. If the APR is the finance charge (interest plus fees) for one year ÷ amount financed, what was the APR for that year?

Answer 1

7.1

Step-by-step explanation:

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Answer 2

1) $1,000 + $4,900 = $5,900

2) $5,900/ $ 83,098.59 = 0.71

3) .71 x 100 = 7.1%

The answer is 7.1% = APR