Finite Math

[kpcp8b]

This seems so easy.. but I don't know what to do!


Find the annual rate of interest for a client that receives a $3,000 Refund Anticipation Loan, which is paid back in 25 days. The RAL fee is $89.00.


I could really use the help!!!!!

 

[kpcp8b]

I think you're supposed to use this formula: A=P(1+rt) But I don't know which number to put in for the A and which for the P... I've tried both ways but I'm not getting a percentage..

 

[masters]

This seems so easy.. but I don't know what to do!


Find the annual rate of interest for a client that receives a $3,000 Refund Anticipation Loan, which is paid back in 25 days. The RAL fee is $89.00.


I could really use the help!!!!!

Hi kpcp8b,

I don't know if RALs use simple interest to determine their fees, but if they do, the $89.00 would be the interest charged on a principle of $3000 for 25 days.

Use the simple interest formula I = PRT to determine the rate of interest.

Remember T is in years, so T = 25/365 when computing. The percentage rate is outrageous!