Question

What is the APR for this loan?...


Quick Loans will loan you $600 with the understanding that you will repay them $674 in two weeks. What is the APR for this loan?

Answer

Annual percentage rate (APR) refers to a real interest rate which an investor is expect from his investment account with the effect of compounding during the period of investment.

Annual percentage rate (APR) is computed using the equation given below:

Simple interest=Principal loan amount×APR100×Time period$674-$600=$600×APR100×252$74=$600×APR100×252APR=$74×52×100$600×2APR=$384,800$1,200APR=320.666666%

As per the requirement of the question, the annual percentage rate (APR) of the loan is 320.66667%

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