Answered

A student borrows $500 for one year, and is charged $50 in interest. He/she also pays a fee of $10 for the loan. What is the total cost of financing and the APR?

Answer :

Answer:

$60 and 12%

Explanation:

The computation of the total cost of financing and the APR is shown below:

The total cost of financing is

= Interest charged + fee paid for the loan

= $50 + $10

= $60

Now the APR is

= Total financing cost ÷ Borrowed amount

= $60 ÷ $00

= 0.12 or 12%

We simply applied the above formula so that the total financing cost and the APR could come

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