Answer:
The APR at which the money is borrowed, is approximately 651.79%
Step-by-step explanation:
The amount which one wishes to borrow for two weeks, P = $600
The amount of interest that one must pay back = $25 per $100 borrowed
Therefore;
The total interest on the $600 loan (borrowed) for two weeks = 25/100× $600 = $150
The number of days for which the amount was borrowed = 2 weeks = 14 days
The Annual Percentage Rate, APR is given as follows;
[tex]APR = \left (\dfrac{\left (\dfrac{Interest \ Paid \ for \ the \ Loan \ duration}{The \ amount \ borrowed} \right )}{The \ number \ of \ days \ the \ amount \ was \ borrowed } \right ) \times 365 \times 100[/tex]
Therefore, we get
[tex]APR = \left (\dfrac{\left (\dfrac{150}{600} \right )}{14 } \right ) \times 365 \times 100 \approx 651.79 \%[/tex]
The annual rate at which the money is borrowed, APR ≈ 651.79%.
