Question

Bella sandino needed funds to cover her credit card bill which was due. She took out a $100 loan at a local cash center payable in 3 weeks with interest of $18 what is the rate of interest paid on this loan

Bella Sandino's loan interest rate is:
a) 6%
b) 12%
c) 18%
d) 24%

Answer 1

Bella Sandino's loan interest rate is 18%, which is calculated based on the interest paid over the 3-week loan period.

Step-by-step explanation:

Bella Sandino's loan interest rate can be calculated based on the given information. The interest paid on her $100 loan is $18 over a period of 3 weeks. To find the weekly rate, divide $18 by 3, resulting in $6 per week. To find the corresponding interest rate, we divide the weekly interest amount by the loan amount: $6 ÷ $100 = 0.06 or 6% per week. Since loan interest rates are typically annualized, to get the annual rate, we multiply the weekly rate by the number of weeks in a year (52), resulting in 6% × 52 = 312%. However, this annual rate is not applicable here because Bella's loan is due in 3 weeks. Thus, the correct option is 18% because the interest represents 18% of the loan amount over the 3-week period.