shaquil needs to borrow $400. the loan company charges him $80 in fees for the loan. shaquil calculates that…

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 shaquils loan? a. 7 days b. 29 days c. 46 days d. 73 days please select the best answer from the choices provided

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 shaquils loan? a. 7 days b. 29 days c. 46 days d. 73 days please select the best answer from the choices provided

Answer

Explanation:

Step1: Recall APR formula

$APR=\frac{\text{Finance Charges}}{\text{Principal}}\times\frac{365}{t}$, where $t$ is the term of the loan in days. We know that the principal $P = 400$, the finance - charge $FC=80$ and $APR = 2.5$ (since $250%=2.5$).

Step2: Rearrange the formula to solve for $t$

From $APR=\frac{FC}{P}\times\frac{365}{t}$, we can get $t=\frac{FC\times365}{P\times APR}$.

Step3: Substitute the values

Substitute $FC = 80$, $P = 400$ and $APR=2.5$ into the formula: $t=\frac{80\times365}{400\times2.5}=\frac{29200}{1000}=29.2\approx29$ days.

Answer:

B. 29 days