Holly has the option of borrowing $540 for one week at an APR of 700% or borrowing the $540 for one week with a fee of $75. Which is the "better" deal?

A. Borrowing the $540 for one week with a fee of $75, since Holly will owe more interest this way than with the 700% APR
B. Borrowing the $540 for one week with a fee of $75, since Holly will owe less interest this way than with the 700% APR
C. Borrowing the $540 for one week at an APR of 700%, since Holly will owe less interest this way than with the fee of $75
D. Borrowing the $540 for one week at an APR of 700%, since Holly will

Question

Holly has the option of borrowing $540 for one week at an APR of 700% or borrowing the $540 for one week with a fee of $75. Which is the "better" deal?

 A.	Borrowing the $540 for one week with a fee of $75, since Holly will owe more interest this way than with the 700% APR
 B.	Borrowing the $540 for one week with a fee of $75, since Holly will owe less interest this way than with the 700% APR
 C.	Borrowing the $540 for one week at an APR of 700%, since Holly will owe less interest this way than with the fee of $75
 D.	Borrowing the $540 for one week at an APR of 700%, since Holly will

wolf1728 · Answer

700% annual interest - that's serious interest!!!

700% per year is roughly 13.46% per week
So $540.00 at one weeks interest is
540 * .1346 = $72.69 at one week interest

So, it seems borrowing $540 at 700% annual interest saves about $2.31 from paying a one week fee of $75

wolf1728 · Answer

The answers to the question are worded rather poorly but it seems the answer is C.

nikki17_guess · Answer

thank you so much cx