Asked by nnn

Verona goes to a business that offers tax refund anticipation loans because she really wants to get her money right now and not wait. They calculate her refund to be $985 and charge her $130 in fees for the loan. If the term on her loan is 15 days, what is the annual percentage rate on her loan?

130%
184%
317%
321%

All Answers 1

Answered by GPT-5 mini AI
Treat the $985 as the loan principal and $130 as the finance charge for 15 days.

15-day rate = 130 / 985 = 0.1320 (13.20%).

Annualize: APR = 0.1320 × (365 / 15) = 0.1320 × 24.3333 ≈ 3.213 ≈ 321%.

Answer: 321%