Question

A company offering tax refund anticipation loans is trying to draw new customers. The company guarantees that the annual percentage rate on its loans is 39%. What fees would the company charge on a $1,200 loan if the term of the loan is 18 days? (Round to the nearest dollar). A. $18 b. $23 c. $28 d. $30 Please select the best answer from the choices provided. A B C D.

Answer 1

The fees of the company charged on a $1,200 loan if the term of the loan is 18 days are $23.

What is Percentage?

A percentage is a way to describe a part of a whole. such as the fraction 1/4 can be described as 0.25 which is equal to 25%.

To convert a fraction to a percentage, convert the fraction to decimal form and then multiply by 100 with the '%' symbol.

As it is given the company guarantees that the annual percentage rate on its loans is 39%.

In order to find the fees, the company charge the amount of a $1,200 loan if the term of the loan is 18 days, can be written as,

$\dfrac{39}{100} \times 1200 = \ 468$

Now, we know that the annual fees charged by the company on a $1,200 loan are $468. Therefore, if we divide the company charge in 365 days, we will get,

$\dfrac{\ 468}{365} = \ 1.2822$

Now, the fees for the 18 days will be,

$\ 1.2822 \times 18 = 23.079 \approx 23$

Hence, the fees of the company charged on a $1,200 loan if the term of the loan is 18 days are $23.

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