Respuesta :
Answer:
Ans. c) The annual percentage rate of the loan is approximately 913%
Explanation:
Hi, well, she borrowed $75 and paid $90 ($75 + $15 fee) in 8 days. So we need to use the following formula to check what 8 days percentage rate was applied to this loan.
[tex]r=\frac{FinalValue}{InitialValue} -1[/tex]
That is:
[tex]r=\frac{90}{75} -1=0.20[/tex]
So she pays 20% for 8 days, to know the annual rate (approx.) we need to do the following operation.
[tex]r(Annual)=\frac{0.20}{8Days} *\frac{365Days}{1Year} =\frac{9.13}{1Year}[/tex]
That is 913% per year.
Best of luck.
