The approximate APR generated when you borrow $1,000 for 5 years at an add-on interest rate of 6%, = $300
Annual percentage rate is defined as the yearly interest generated by a sum that's charged to borrowers.
The formula for APR = p×t×r/100
The principal amount deposited (p)= $1000
Time (t) = 5 years
At the rate (r) = 6%
Therefore APR=
[tex] \frac{p \times t \times r}{100} [/tex]
[tex] \frac{1000 \times 5 \times 6}{100} [/tex]
[tex] \frac{30000}{100} [/tex]
APR = $300
Therefore, the approximate APR = $300
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