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6 January, 11:51

Verona goes to a business that offers tax refund anticipation loans because she really wants to get her money right now and not wait. They calculate her refund to be $985 and charge her $130 in fees for the loan. If the term on her loan is 15 days, what is the annual percentage rate on her loan? a. 130%b. 184%c. 317%d. 321%

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  1. 6 January, 12:00
    0
    Hello there.

    Verona goes to a business that offers tax refund anticipation loans because she really wants to get her money right now and not wait. They calculate her refund to be $985 and charge her $130 in fees for the loan. If the term on her loan is 15 days, what is the annual percentage rate on her loan?

    a. 130%
  2. 6 January, 12:07
    0
    We solve this by:

    130 / 985 = 0.1320 x 100% = 13.20%

    We must convert this to annual percentage rate

    (1 + 0.1320 / 24) ^24 - 1 = 1.32 x 100% = 132%

    The closes answer would be

    a. 130%
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