The annual percentage rate (APR) on a single-payment loan of $1,000 at a simple interest rate of 12% is:
A) 10%.
B) 12%.
C) 15%.
D) 18%.
E) 24%.

Question

Quizplus · Accepted Answer

The annual interest rate is 12%, so the APR is also 12%. Simple interest only accrues on the principal amount, so there is no compounding effect to consider. Therefore, the APR and the simple interest rate are the same.

The Annual Percentage Rate (APR) on a Single-Payment Loan of $1,000