Simpson Conglomerates borrows $18000 for a short-term purpose. The loan will be

Question

Simpson Conglomerates borrows $18000 for a short-term purpose. The loan will be repaid after 60 days, with Simpson paying a total of $18500. What is the approximate cost of credit using the APR, or annual percentage rate, calculation? A) 3.33% B) 16.67 C) 10.00 D) 11.75 Simpson Conglomerates borrows $18000 for a short-term purpose. The loan will be repaid after 60 days, with Simpson paying a total of $18500. What is the approximate cost of credit using the APR, or annual percentage rate, calculation? A) 3.33% B) 16.67 C) 10.00 D) 11.75 A) 3.33% B) 16.67 C) 10.00 D) 11.75

Explanation / Answer

Answer : Answer 'B' is correct. That is 16.67%

Answer Loan 18000 Loan paid 18500 Interest 500 Time period 60 days = 2 Months Interest Rate p.a. = 500/18000*100*12/2 = 16.67%

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