A borrower was charged a total interest of 4.5% on a $⁢500 principal for a 3 -month credit term. What is the APR? APR =((Total Interest Percentage)/(Credit Terms in Months))⋅12

Use the formula APR = (total interest percentage ÷ credit term in months) × 12. Substituting the values gives (4.5% ÷ 3) × 12 = 1.5% × 12 = 18%. The APR is 18 percent, choice A.

AI-written and checked against the verified answer.