Craig Has Just Been Quoted What Appears to Be a Very

question 79

Multiple Choice

Craig has just been quoted what appears to be a very competitive loan for $3,500 to be paid back in 36 monthly payments of $123.47 and a finance charge of $945.However,the lender said that the interest would be calculated using the add-on method.Using the n-ratio method of estimating the APR,what is the APR on this loan?
$\mathrm{APR}=\frac{\mathrm{Y}(95 \mathrm{P}+9) \mathrm{F}}{12 \mathrm{P}(\mathrm{P}+1) (4 \mathrm{D}+\mathrm{F}) }$

• A)14.9 percent
• B)16.3 percent
• C)9.0 percent
• D)13.2 percent

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