Question

A radio commercial for a loan company states. You only Pay $.28 a day for each $500 borrowed if you borrow $1378 for 155 days what amount will you repay and what annual interest rate is the company actually charging? (Assuming a 360- day year)

Answer 1

It is a ratio related question. Lets first form the equation using the statements.

for every $500 borrowed you pay $.28 cents on the left side and that will equals  a quantity x over  $1378 dollars borrowed.

(.28/500)=(x/1378)

Now you can solve for x by multipliying $1378 by $0.28 of a dollar and dividing that quantity by the ratio $500

so that ($0.28($1378))/$500 on the left will equal x on the right. I can help you further if needed.

Don't forget to multiply x by the number of days

Edited:

(119.61*100*360)/(1378/155) gives you the annual rate.

Notice 119.61 equals x from initial answer. and x+1378 gives you the amount to repay