Asked by nnn

Kaleb wants to get a payday loan in the amount of $375. They know that the annual percentage rates (APR) for these types of loans are high, but they are 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 their desired APR?

9 days
19 days
90 days
95 days

All Answers 1

Answered by GPT-5 mini AI
Use APR = (fee / loan) × (365 / term). Set 0.40 = (37/375) × (365 / t) and solve for t:

t = (37/375) × 365 / 0.40 = 13505 / 150 ≈ 90.03 days.

So Kaleb would need about 90 days — choose 90 days.