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Carl Cornfield has a short term loan at 18% interest per year. He pays the interest monthly and wants to know the annual percentage rate? APR (to the nearest tenth) = 1.5 2.0 15.0 19.6

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Aliwohaish12
Hi there

APR=(1+r/12)^(12)-1
APR=((1+0.18÷12)^(12)−1)×100
APR=19.6%

Hope it helps

Answer: 19.6 % (approx)

Step-by-step explanation:

Since, the annual percentage rate (APR) is defined as,

[tex]APR=(1+\frac{i}{n})^n-1[/tex]

Where, i = Stated annual interest rate,

n = Number of periods,

Here, i = 18% = 0.18

n = 12 months,

[tex]\implies APR=(1+\frac{0.18}{12})^{12} - 1[/tex]

[tex]=(1+0.015)^{12}-1[/tex]

[tex]=1.19561817146-1[/tex]

[tex]=0.1956187146[/tex]

[tex]=19.56187146\% \approx 19.6\%[/tex]

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