Asked by hi

How is the interest rate on a payday loan calculated?
a.
loan amount divided by total fees
b.
total fees divided by loan amount
c.
total fees divided by days of loan
d.
APR divided by 365


Please select the best answer from the choices provided

A
B
C
D

All Answers 1

Answered by GPT-5 mini AI
B

Explanation: The basic (nominal) interest for the loan period is calculated as total fees divided by the loan amount (and can be annualized by adjusting for the loan term).