Question

Jenny borrows $1200 from a payday lender. The finance charge is $50 for two weeks. What is the APR on the loan? Use the formula contained in Worksheet formula APR=(finance charge/total amount financed) x (52/# of weeks in term of loan) x 100

Answer 1

$\begin{gathered} \text{APR = (}\frac{fin\text{ance charge}}{\text{total amount financed}})\times\frac{52}{2}\text{ }\times100 \\ \end{gathered}$$\text{APR = (}\frac{60}{1100})\times26\text{ }\times100$$\begin{gathered} \text{APR = 0.054545454 }\times26\text{ }\times100 \\ \text{APR =\ 141.82} \end{gathered}$