Calculate the APR of a loan for $9,775 (which includes loan fees of $210), at 13% for 4 years. Round your answer to the nearest hundredth percent.

Question

Mathematics

Delilah Shields

23 April, 22:29

Calculate the APR of a loan for $9,775 (which includes loan fees of $210), at 13% for 4 years. Round your answer to the nearest hundredth percent.

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Answers (1)

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Blayne · Answer 1

Answer: 13.54%

Step-by-step explanation:

We compute the annual percentage rate (APR) using the formula:

APR=[ (loanfee+interest) / Principaln*365]*100

Where n is the number of days in the loan repayment term.

In our question, we have:

r = 0.13n=4*365=1,460 days.

Therefore:APR=[ (210+9,775*0.13) / 9,7751,460*365]*100=13.54%