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?
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:
$\begin{array}{rcl}\mathrm{Simple}\mathrm{interest}& =& \mathrm{Principal}\mathrm{loan}\mathrm{amount}\times \frac{\mathrm{APR}}{100}\times \mathrm{Time}\mathrm{period}\\ \$674-\$600& =& \$600\times \frac{\mathrm{APR}}{100}\times \frac{2}{52}\\ \$74& =& \$600\times \frac{\mathrm{APR}}{100}\times \frac{2}{52}\\ \mathrm{APR}& =& \frac{\$74\times 52\times 100}{\$600\times 2}\\ \mathrm{APR}& =& \frac{\$384,800}{\$1,200}\\ \mathrm{APR}& =& 320.666666\%\end{array}$
As per the requirement of the question, the annual percentage rate (APR) of the loan is 320.66667%