QuestionAugust 27, 2025

Max borrowed 100 from a payday lender with an APR of 400 percent. He only has two weeks to pay the loan back. Max isn't sure how much he needs to pay back for this loan, and he is only thinking about having fun this evening. How much will Max pay back in total for this loan? 400.00 500.00 103.80 115.20

Max borrowed 100 from a payday lender with an APR of 400 percent. He only has two weeks to pay the loan back. Max isn't sure how much he needs to pay back for this loan, and he is only thinking about having fun this evening. How much will Max pay back in total for this loan? 400.00 500.00 103.80 115.20
Max borrowed 100 from a payday lender with an APR of 400 percent. He only has two weeks to pay the loan back. Max isn't sure how much he needs to pay back for this loan, and he is only thinking about having fun this evening. How much will Max pay back in total for this loan? 400.00 500.00 103.80 115.20

Solution
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Answer

\115.38 Explanation 1. Calculate the interest rate for two weeks APR is 400%, which means annual interest rate. For two weeks, calculate the weekly interest rate: \frac{400\%}{52} \times 2 = \frac{800}{52} \approx 15.38\%. 2. Calculate the total repayment amount Use the formula for simple interest: Total repayment = Principal + Interest. Interest = Principal \times Interest Rate. So, 100 + 100 \times 0.1538 = 115.38.

Explanation

1. Calculate the interest rate for two weeks<br /> APR is 400%, which means annual interest rate. For two weeks, calculate the weekly interest rate: $\frac{400\%}{52} \times 2 = \frac{800}{52} \approx 15.38\%$.<br />2. Calculate the total repayment amount<br /> Use the formula for simple interest: Total repayment = Principal + Interest. Interest = Principal $\times$ Interest Rate. So, $100 + 100 \times 0.1538 = 115.38$.
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