7
QuizMultiple Choice

Consumer Responsibilities

Question 7 • [PERFIN] Personal Finance, Sem 2 (26-27)

Shaquil needs to borrow $400. The loan company charges him $80 in fees for the loan. Shaquil calculates that the annual percentage rate (APR) on his loan is 250%. Approximately what is the term of Shaquil’s loan?

Answer
A
7 days
B
29 days
C
46 days
D
73 days

Explanation

The fee is $80 on a $400 loan, so the fee is 80 ÷ 400 = 0.20, or 20% of the amount borrowed. Using APR = (fee ÷ loan amount) × (365 ÷ term in days), solve 2.50 = 0.20 × (365 ÷ term), which gives a term of about 29 days. So the correct choice is 29 days.

AI-written and checked against the verified answer.

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