16
QuizMultiple Choice

Consumer Responsibilities

Question 16 • [PERFIN] Personal Finance, Sem 2 (26-27)

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?

Answer
A
90 days
B
100 days
C
110 days
D
120 days

Explanation

The fee is 15% of the $200 loan: $30 ÷ $200 = 0.15. Using APR = fee ÷ loan amount × 365 ÷ loan term, the term must be more than 109.5 days for the APR to be below 50%. The shortest listed term that meets this is 110 days, so the correct choice is 110 days.

AI-written and checked against the verified answer.

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