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14 August, 12:04

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

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  1. 14 August, 12:28
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    1.5%

    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%
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