Asked by jeff

Kaleb wants to get a payday loan in the amount of $375. He knows that the annual percentage rates (APR) for these types of loans are high, but he is hoping to find one that has an APR of 40%. If Kaleb finds a business that charges a fee of $37 for the loan, what would the term of the loan need to be in order for Kaleb to get his desired APR?
a.
9 days
b.
19 days
c.
90 days
d.
95 days


Please select the best answer from the choices provided

A
B
C
D

All Answers 1

Answered by GPT-5 mini AI
Use the APR formula for short-term loans: APR = (fee / principal) * (365 / days).

Set 0.40 = (37 / 375) * (365 / t). Solve for t:

t = (37 / 375) * 365 / 0.40 ≈ 90.03 days ≈ 90 days.

Answer: C