Myrtle needs to borrow $200 and is hoping to get a payday loan with an annual percentage rate (APR) of less than 50%. If a company charges her $30 in fees for the loan, what is the minimum loan term needed that would give Myrtle her desired APR?

The fee is $30 on a $200 loan, so the fee is 30 ÷ 200 = 15% of the amount borrowed. Annualizing that cost gives an APR of 15% × (365 ÷ loan term in days). To be below 50%, the term must be longer than 109.5 days, so the minimum choice is 110 days (C).

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