For a loan of money, a Sailor may charge another member of the armed forces what maximum annual simple interest rate?

The correct answer reflects the maximum annual simple interest rate that a member of the armed forces, like a Sailor, is allowed to charge another service member for a loan. In accordance with the applicable regulations governing such transactions, the limit is set to 18%.

This rule is in place to protect service members from potentially exploitative lending practices, ensuring that interest rates remain at a reasonable level. By establishing a cap at 18%, the regulation seeks to balance the needs of soldiers seeking short-term loans against the importance of maintaining ethical standards within the military.

Higher rates, like 20%, would exceed this cap, potentially putting service members at risk of financial exploitation, while a lower maximum, such as 10% or 15%, does not reflect the established legal limits on the amount of interest that can be charged. This regulatory framework emphasizes fairness and protection for military personnel when engaging in financial transactions with one another.