Respuesta :
Answer:
B. A payday loan for $1500 that is due in 10 days with a fee of $90, since it has the shorter period
The higher effective interest rate is for A payday loan for $1500 that is due in 10 days with a fee of $90, since it has the shorter period, the correct option is B.
What is Interest Rate?
Interest Rate is the rate at which a person either takes loan, or a person lends money to somebody.
The interest rate is different for different types of loans, some interest are simply calculated on the principal, called as Simple Interest while some are calculated on both the principal and the interest, called as Compound Interest.
A payday loan has principal of $1500
It is due in 12 days, so time period is 12 days.
The interest amount is $90
I = P * R *T / 100
90 = 1500 *12 *R /100
R = 0.5 %
A payday loan has principal of $1500
It is due in 10 days, so time period is 10 days.
The interest amount is $90
90 = 1500 *10 *R /100
R = 0.6 %
The rate of interest is more for a payday loan for $1500 that is due in
10 days with a fee of $90.
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