9514 1404 393
Answer:
- title: 300%
- payday: 650%
- check cashing: 214%
Step-by-step explanation:
The formula for simple interest is ...
I = Prt
where P is the principal amount loaned, r is the annual rate, and t is the time in years. Solving for interest rate, we get ...
r = I/(Pt)
We assume 12 months or 52 weeks in a year.
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Car title loan
r = 125/(500×1/12) = 3 × 100% = 300%
The APR is 300%.
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Payday loan
r = 125/(500×2/52) = 6.5 × 100% = 650%
The APR is 650%.
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Check cashing
r = 19.66/(478.41×1/52) ≈ 2.1369 × 100% ≈ 214%
The APR is about 214%.
