Question

Sam Seller offers credit at 19% interest per year.

To the nearest tenth, APR = %.

A:20.7
B:21.5
C:22.2

Answer 1

Answer: A. APR = 20.7 %

Explanation:

We know that an annual percentage rate (APR) is the annual rate which is charged for earning or borrowing by an investment.

The formula to calculate the annual percentage rate is given by :-

`\text{APR}=(1+(r)/(n))^n-1`, where r is the interest rate and n is the number of time period for which interest is compounded per month.

Given : The rate of interest :
`r= 19\%=0.19`

Time periods :
`n=12`

`\text{APR}=(1+(0.19)/(12))^(12)-1\\\\\Rightarrow\ \text{APR}=0.20745099813\\\\\Rightarrow\ \text{APR}=0.20745099813*100=20.745099813\%\approx20.7\%`

Answer 2

(1+0.19/12)^(12))-1) =0.20745

= 20.74%

rounded to nearest tenth = 20.7%

Answer is A