AnswersCMS 2026-2027 Economics and Personal Finance INITIAL CREDITPractice TestQuestion 7
7
practice testMultiple Choice

Practice Test

Question 7 • CMS 2026-2027 Economics and Personal Finance INITIAL CREDIT

Kaleb wants to get a payday loan in the amount of 375 dollars He knows that the annual percentage rates (APR) for these types of loans are high, but he is hoping to find one that has an APR of 40 percent If Kaleb finds a business that charges a fee of 37 dollars for the loan, what would the term of the loan need to be in order for Kaleb to get his desired APR?

Answer
A
90 days
B
95 days
C
19 days
D
9 days

Explanation

Use the APR formula: APR = (fee ÷ loan amount) × (365 ÷ term in days) × 100. With a $37 fee on a $375 loan, the fee is about 9.87% of the loan. Solving for the term at a 40% APR gives (37 ÷ 375) × 365 ÷ 0.40 ≈ 90 days, so the loan term would need to be 90 days.

AI-written and checked against the verified answer.

Previous
Next

More from this Course

practice test
22 verified answers

Practice Test

practice test
20 verified answers

Practice Test

practice test
16 verified answers

Practice Test