5
QuizMultiple Choice

N/A — Exam

Question 5 • CMS 2026-2027 Economics and Personal Finance HONORS INITIAL CREDIT

A company offering tax refund anticipation loans is trying to draw new customers. The company guarantees that the annual percentage rate on its loans is 39 percent What fees would the company charge on a 1 dollars comma 200 loan if the term of the loan is 18 days? (Round to the nearest dollar).

Answer
A
28 dollars
B
30 dollars
C
18 dollars
D
23 dollars

Explanation

Use simple interest: fee = loan amount × annual rate × fraction of a year. For an 18-day loan, the fee is $1,200 × 0.39 × (18 ÷ 365) ≈ $23.08, which rounds to $23. The correct choice is $23.

AI-written and checked against the verified answer.

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