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What is the APR of a payday loan for $1825 due in 18 days that charges a $135 fee

User Amaris
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1 Answer

1 vote

Answer:

1.5%

Step-by-step explanation:

In calculating APR, the principal amount, additional fee, and length of days.

The process is as follow

Add all the fees and divide by the outstanding amount

Multiply by 365

Divide by the number of days left in the loan

In this case,

the fee is $135

the principal amount is $1825

number of days is 18

APR = $135/ 1825

= 0.073972 x 365

=27/18

=1.5%

User Palash Karia
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