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timia needs some cash in a hurry. she owns her car outright and is considering a title loan. the lender has told timia that she could borrow $1750 for 1 month and the fee would be $140. what is the apr on timia’s loan? assume 12 equal months.

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The annual percentage rate on Timia's loan can be calculated using the percentage interest formula. Hence, the APR on her loan is 96%

Recall :

  • Simple interest = principal × rate × time

  • Principal = $1750
  • Interest = $140

  • Time = 1 month = 1/12 = 0.083333

Plugging the values into the equation :

140 = 1750 × rate × 0.0833333

140 = 145.83333 × rate

Rate = 140 ÷ 145.83333

Rate = 0.96

He, the annual percentage rate on the loan is 96%

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