Quick Loans: Calculate Your APR

Question:

If Quick Loans will loan you $500 with an interest of $4.74 per day, what is the Annual Percentage Rate (APR) for this loan?

Answer:

The APR for this loan is approximately 3.45%.

Quick Loans is offering a $500 loan with a daily interest rate of $4.74. To calculate the Annual Percentage Rate (APR) for this loan, we need to consider the total interest paid over the course of a year. In this case, the daily interest rate of $4.74 will be multiplied by the number of days in a year, which is 365.

By multiplying the daily interest rate by 365 and then dividing it by the loan amount of $500, we can determine that the APR for this loan is approximately 3.45%.

Understanding the APR of a loan is essential for borrowers to make informed financial decisions. It represents the total cost of borrowing over a year and can help individuals compare loan offers to find the most cost-effective option.