Question

Donnie has the option of borrowing $680 for 1 week at an apr of 450% or borrowing the $680 for 1 week with a fee of $60. which is the "better" deal?

Answer 1

borrowing the $680 for 1 week at an APR of 450%, since Donnie will owe less interest this way than with the fee of $60

APEX LEARNING

Answer 2

The better option would be borrowing $680 for 1 week with an APR of 450% because that is less than a flat fee of $60. The APR is the annual percentage rate, so even though the rate looks high, when broken down to what would be paid over the course of the week it's roughly 8% that is charged.