8 Multiple Choice 1 point If a loan charges 1% interest per month, what is its APR? 1% 1.68% 12% 12.68%

To calculate the Annual Percentage Rate (APR) from a monthly interest rate, we need to compound the monthly rate over 12 months. The formula to convert a monthly interest rate to an APR is: Given the monthly interest rate is or in decimal form, we can plug this into the formula: First, calculate \( (1 + 0.01)^{12} \): Using a calculator: Now, subtract 1 from this result to find the APR: Convert the decimal form back to a percentage: Rounding to two decimal places, the APR is approximately .Therefore, the correct answer is: