Choose the correct answers.
Karla Kaufmann borrowed $750 at 12 percent for one year. She paid a $20 processing fee.
The interest paid will be $
.
Thus, the total finance charge (the interest plus the processing fee) will be $
Therefore, to the nearest tenth, the APR = total finance charge ÷ amount borrowed =
%.
The interest paid will be an amount less than the debt you owe to your friends after eating at a fancy restaurant.
Thus, the total finance charge (the interest plus the processing fee) will be an unexpected expense that makes you question your life choices.
Therefore, to the nearest tenth, the APR = total finance charge ÷ amount borrowed = a mind-bogglingly high percentage that makes you want to hide under your bed.
To calculate the interest paid on the loan, we can use the formula:
Interest = Principal * Rate * Time
In this case, the principal (amount borrowed) is $750 and the interest rate is 12 percent. The time period is one year. Let's calculate the interest:
Interest = $750 * (12/100) * 1
Interest = $90
So, the interest paid on the loan will be $90.
Now let's calculate the total finance charge by adding the interest paid and the processing fee:
Total Finance Charge = Interest + Processing Fee
Total Finance Charge = $90 + $20
Total Finance Charge = $110
Therefore, the total finance charge is $110.
To find the APR (Annual Percentage Rate) to the nearest tenth, we need to divide the total finance charge by the amount borrowed:
APR = Total Finance Charge / Amount Borrowed
APR = $110 / $750
Calculating the division gives us:
APR ≈ 0.1466667
Converting this decimal to a percentage, we get:
APR ≈ 14.7%
Therefore, the APR, to the nearest tenth, is 14.7%.
To calculate the interest paid, we can use the formula:
Interest = Principal x Rate
Where the principal is $750 and the rate is 12%, which can be written as a decimal as 0.12.
Interest = $750 x 0.12 = $90
Therefore, the interest paid will be $90.
To calculate the total finance charge, we need to add the interest paid and the processing fee:
Total finance charge = Interest + Processing fee
Total finance charge = $90 + $20 = $110
Therefore, the total finance charge will be $110.
To calculate the APR (Annual Percentage Rate) to the nearest tenth, we can use the formula:
APR = (Total finance charge / Amount borrowed) x 100%
APR = ($110 / $750) x 100% ≈ 14.7%
Therefore, to the nearest tenth, the APR will be 14.7%.