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25 April, 02:57

Choose the correct answer. Sonja Koch has a $90,000 loan with a 9% annual interest rate. She paid $350 for a title background check, $400 for the title insurance, $250 for deeds and attorneys, and $8,690.40 in total interest for the first year. If the APR is the finance charge (interest plus fees) for one year : amount financed, what was the APR for that year?

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  1. 25 April, 03:04
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    Given:

    loan amount : 90,000

    annual interest rate: 9%

    title background check: 350

    title insurance: 400

    deeds and atty fees: 250

    total interest for the 1st year: 8,690.40

    APR = finance charge for one year / amount financed

    finance charge = interest plus fees

    finance charge = 8,690.40 + 350 + 400 + 250 = 9,690.40

    APR = 9,690.40 / 90,000

    APR = 0.10767

    0.10767 x 100% = 10.76 or 10.77% APR for the year.
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