Aradio commercial for a loan company states: “you only pay $0.29 a day for. each $500 borrowed.” if you borrow $1,500 for 120 days, what amount will you. repay, and what annual interest rate is the company actually charging?

Total amount to be repay is $ 1604.4

The annual  interest rate  the company actually charging is 25.40%

Step-by-step explanation:

Given:  A radio commercial for a loan company states: “You only pay $0.29 a day for each $500 borrowed.” We have borrowed $1,500 for 120 days.

We have to determine the amount to be repay and the annual interest rate  the company actually charging.

UNITARY method is a method in which we first find the value of a single unit and then find the desired value by multiply it with unit value.

Since, we have to pay $0.29 a day for each $500 borrowed.

Thus, when we borrow $1 , we pay

So, when $1500  is borrowed , we pay  

Thus, for 120 days we pay 0.87 × 120 = $104.4

Thus, total amount to be repay = 1500 + 104.4 = $ 1604.4

and annual interest rate is given by,

We have to find rate

Simple interest = $ 104.4

Principal = $1500

time = 120 days

In year time is

Substitute, we have,

Simplify, we have,

r = 25.40%

Thus, the annual  interest rate  the company actually charging is 25.40%

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step-by-step explanation:

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