Holly has the option of borrowing $540 for one week at an APR of 700% or borrowing the $540 for one week with a fee of $75. Which is the "better" deal?

A. Borrowing the $540 for one week at an APR of 700%, since Holly will owe less interest this way than with the fee of $75

B. Borrowing the $540 for one week at an APR of 700%, since Holly will owe more interest this way than with the fee of $75

C. Borrowing the $540 for one week with a fee of $75, since Holly will owe more interest this way than with the 700% APR

D. Borrowing the $540 for one week with a fee of $75, since Holly will owe less interest this way than with the 700% APR

Question

Queen Bee

Mathematics

14 May, 06:54

Holly has the option of borrowing $540 for one week at an APR of 700% or borrowing the $540 for one week with a fee of $75. Which is the "better" deal?

A. Borrowing the $540 for one week at an APR of 700%, since Holly will owe less interest this way than with the fee of $75

B. Borrowing the $540 for one week at an APR of 700%, since Holly will owe more interest this way than with the fee of $75

C. Borrowing the $540 for one week with a fee of $75, since Holly will owe more interest this way than with the 700% APR

D. Borrowing the $540 for one week with a fee of $75, since Holly will owe less interest this way than with the 700% APR

+3

Answers (1)

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Roland Patterson · Answer 1

700% annual interest - that's serious interest! 700% per year is roughly 13.46% per week So $540.00 at one weeks interest is 540 *.1346 = $72.69 at one week interest So, it seems borrowing $540 at 700% annual interest saves about $2.31 from paying a one week fee of $75

wolf1728 a year ago The answers to the question are worded rather poorly but it seems the answer is C.