Final answer:
To calculate the APR of a $600 loan that charges $4.11 in daily interest, multiply the daily interest by the number of days in a year, then divide by the principal and convert to a percentage. The APR in this case is 250.025%.
Step-by-step explanation:
Calculating the APR of a Loan
To calculate the Annual Percentage Rate (APR) for a loan, you need to know the daily interest rate and the principal amount of the loan. In this case, the loan is for $600, and the daily interest charged is $4.11. The APR is the annualized rate that reflects all finance charges, including the interest rate and other fees.
First, we need to find out the annual interest paid using the daily interest:
- Daily interest: $4.11
- Annual interest: $4.11 × 365 (days in a year) = $1,500.15
Next, we divide the annual interest by the principal to get the decimal form of the interest rate:
- Annual interest rate (decimal): $1,500.15 / $600 = 2.50025
Finally, we convert the decimal into a percentage to get the APR:
- APR: 2.50025 × 100 = 250.025%
Therefore, the APR for a $600 loan with a daily interest of $4.11 is 250.025%.