Answers CMS 2026-2027 Economics and Personal Finance HONORS INITIAL CREDIT Practice ExamQuestion 12

12

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Practice Exam

Question 12 • CMS 2026-2027 Economics and Personal Finance HONORS INITIAL CREDIT

Verona goes to a business that offers tax refund anticipation loans because she really wants to get her money right now and not wait. They calculate her refund to be 985 dollars and charge her 130 dollars in fees for the loan. If the term on her loan is 15 days, what is the annual percentage rate on her loan?

Answer

A

317 percent

B

184 percent

C

130 percent

D

321 percent

Explanation

Use the APR formula: (loan fee ÷ loan amount) × (365 ÷ loan term) × 100. Substituting the values gives (130 ÷ 985) × (365 ÷ 15) × 100 ≈ 321%. The annual percentage rate is 321 percent, choice D.

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