What is the true apr of this payday


JJ has a Payday loan for $500. The Payday loan company is charging JJ 12% interest for a 3-month loan. JJ thinks he’s getting a great deal – only 12%! What is the true APR of this payday loan?

A. 12% APR, duh.

B. 48% APR

C. 4% APR

D. 312% APR

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Financial Management: What is the true apr of this payday
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