Question

Carl Cornfield has a short term loan at 18% interest per year. He pays the interest monthly and wants to know the annual percentage rate? APR (to the nearest tenth) = 1.5 2.0 15.0 19.6

Answer 1

Hi there

APR=(1+r/12)^(12)-1
APR=((1+0.18÷12)^(12)−1)×100
APR=19.6%

Hope it helps

Answer 2

Answer: 19.6 % (approx)

Explanation:

Since, the annual percentage rate (APR) is defined as,

`APR=(1+(i)/(n))^n-1`

Where, i = Stated annual interest rate,

n = Number of periods,

Here, i = 18% = 0.18

n = 12 months,

`\implies APR=(1+(0.18)/(12))^(12) - 1`

`=(1+0.015)^(12)-1`

`=1.19561817146-1`

`=0.1956187146`

`=19.56187146\% \approx 19.6\%`