Answer
(a) Accion's interest rate $15 \%$.
(b) The Payment to loan shark is $\$ 1220$.
(c) Accion, since the interest rate is lower.
Work Step by Step
(a) Accion's interest rate $=(1150-1000) / 1000=0.15=15 \%$.
(b) The Payment to loan shark is $=1000+22 \% \cdot 1000=\$ 1220$.
(c) Accion, since the interest rate is lower. Accion’s effective annual interest rate is $15\%$ (you pay $\$1,150$), while the loan shark charges $22\%$ (you’d pay $\$1,220$). Lower cost → choose Accion.
