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Repayment Amount and Interest Rate

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A radio commercial for a loan company states: You only pay 26 cents a day for each $500 borrowed. If you borrow $1,491. for 299 days, what amount will you repay, and what annual interest rate is the company actually charging?

a. amount you repay = ?
b. annual interest rate = ?

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Solution Summary

The repayment amount and the annual percentage rate calculated for a loan.

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If $1491 are borrowed, then the amount of money that we have pay every day can be calculated as a proportion:

.26 x
----- = ----
500 ...

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