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Jim Tree borrowed $1,000 at 10 percent for one year. He paid a $45 processing fee and $100 in interest. He calculated the APR to the nearest tenth.

Respuesta :

The finance charge is $145. $100 interest + $45 processing fee. So the APR $145/$1000= 0.145. remember to move the decimal 2 places to the right. so the answer it 14.5% APR.

Answer:

The APR is 14.5%

Step-by-step explanation:

APR is Annual Percentage Rate which is levied on the amount borrowed.

Jim Tree borrowed $1,000 at 10 percent for one year.

He paid a $45 processing fee and $100 in interest.

So, the total finance charge is = [tex]400+45=145[/tex]

Therefore, the APR is = [tex]\frac{145}{1000}[/tex] = 0.145

And in percentage it is [tex]0.145\times100=14.5[/tex]%

Hence, the answer is 14.5%

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