oshua borrowed $2,300 for one year and paid $138 in interest. The bank charged him a service charge of $15. If Joshua repaid the loan in 12 equal monthly payments, what is the APR

0.067 or 6.7%

Explanation:

Given;

Principal = $2300

interest = $138

Service charge = $15

Therefore to find APR, we use the formula:

APR=Finance charge/Principal

To find finance charge we use

Finance charge (FC) = interest + service charge (SC)

= $138 + $15

= $153

Therefore

APR = Finance charge / Principal

= $153 / $2300

= 0.067 or 6.7%