The APR at which you are borrowing money is 325% answer.
What is APR mean?
Annual percent charge (APR) refers to the every year hobby generated by way of a sum this is charged to borrowers or paid to investors.
- The interest on the credit amount for one year on the credit card.
- The system for calculating APR is straightforward. It consists of multiplying the periodic hobby charge through the wide variety of durations in a 12 months in which the price is carried out.
- Purchaser safety legal guidelines require agencies to disclose the APRs associated with their product offerings in an effort to prevent organizations from deceptive clients. for instance, in the event that they were now not required to disclose the APR.
- A company would possibly advertise a low month-to-month hobby fee whilst implying to customers that it turned into an annual price. this could misinform a patron into comparing a apparently low monthly rate against a apparently excessive annual one. by requiring all corporations to disclose their APRs, customers are presented with an assessment.
APR is calculated by means of multiplying the periodic interest rate through the wide variety of intervals in a 12 months wherein it was applied. It does not imply how typically the price is certainly carried out to the stability.
Principal = $400
time = 4 weeks = 5 *1/52 years
Interest = $25 per $100
Hence for $400 = interest will be $100
APR = Annual % rate
I = P* R *t
100 = 400 * 4/52 * r/100
Hence, APR = r = 325% answer.
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