6
QuizMultiple Choice

Consumer Responsibilities

Question 6 • [PERFIN] Personal Finance, Sem 2 (26-27)

Based on a $500 loan amount, rank the following companies from the lowest to highest annual percentage rate (APR).CompanyFees ChargedTerm of LoanA$6020 daysB$5012 daysC$7515 daysD$1008 days

Answer
A
A, B, C, D
B
B, A, C, D
C
D, B, C, A
D
D, C, B, A

Explanation

Estimate each APR by dividing the fee by the $500 loan and annualizing over the loan term: APR = (fee ÷ 500) × (365 ÷ days). The approximate APRs are A: 219%, B: 304%, C: 365%, and D: 913%. From lowest to highest, the order is A, B, C, D, which is choice a.

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