Payday loans are very short-term loans that charge very high interest rates. You can borrow $500 today

Question:

Payday loans are very short-term loans that charge very high interest rates. You can borrow $500 today and repay $590 in two weeks. What is the compounded annual rate implied by this 18 percent rate charged for only two weeks?

Fantastic news! We've Found the answer you've been seeking!

Step by Step Answer:

Related Book For book-img-for-question

Finance Applications and Theory

ISBN: 978-0077861681

3rd edition

Authors: Marcia Cornett, Troy Adair

See More Books

Question Posted: Sep 23, 2014 10:27 AM

See More Questions

Payday loans issued by banks are often referred to as direct deposit advances. In early 2013, the average direct deposit advance charged $10 for a $100 advance and was due in 10 days. What is the...
You have several student loans that have interest rates that change every year. After graduation, you can consolidate these loans into a fixed rate single loan. You can consolidate now or one year...
You have $1,500 to invest today at 7% interest compounded annually. a. Find how much you will have accumulated in the account at the end of (1) 3 years, (2) 6 years, and (3) 9 years. b. Use your...
Use the data in Exercise 13.28.To familiarize yourself with recursive least squares, estimate the savings functions for 19701981, 19701985, 19701990, and 19701995. Comment on the stability of...
Strange instant messages occasionally pop up on your computer screen during your team's virtual meetings, followed quickly by embarrassed apologies from one of your colleagues in another city. You...
Identify the quantity as a scalar or as a vector. Explain your reasoning. (a) The muzzle velocity of a gun (b) The price of a companys stock (c) The air temperature in a room (d) The weight of a car
What would you say to a marketing manager who wished to use only one global model across his entire clientele, rather than trying segmentation models?
In 2007, Peggy, a widow, places $3 million in trust, life estate to her children, remainder to her grandchildren, but retains the right to revoke the trust. In 2011, when the trust is worth $3.1...
Six months ago, you purchased 1,700 shares of ABC stock for $23.58 a share. You have received dividend payments equal to $.90 a share. Today, you sold all of your shares for $25.86 a share. What is...
The December 31, 2020, trial balance of Sable Inc. included the following accounts: Cash 956,000 Accounts receivable 30,000 Unearned service revenue 20,000 Supplies Prepaid insurance Equipment Salary...
A loan is offered with monthly payments and a 13 percent APR. Whats the loans effective annual rate (EAR)?
Whats the interest rate of a 7-year, annual $4,000 annuity with present value of $20,000?
Your firm has been consulted by the managing director of Inzone plc, which owns a chain of retail stores. Each store has departments selling furniture, tableware and kitchenware.Departmental managers...
Sams old friend Dot is considering setting up a business offering historical boating trips along the River Thames. Dot thinks that she may be able to make a good living out of this. She has carried...
Arrow Industries employs a standard cost system in which direct materials inventory is carried at standard cost. Arrow has established the following standards for the direct costs of one unit of...
Explain the financial effect (increase, decrease, or no effect) of each of the following transactions on stockholders' equity: a. Purchased supplies for cash. b. Paid an account payable. c. Paid...
What type of account-asset, liability, stockholders' equity, dividend, revenue, or expense-is each of the following accounts? Indicate whether a debit entry or a credit entry increases the balance of...
Is it possible for an accounting transaction to only affect the left side of the accounting equation and still leave the equation in balance? If so, provide an example.
(a) Jane Jelk believes the production cost report is an external report for stockholders. Is Jane correct? Explain. (b) Identify the sections in a production cost report
QUESTION 2 The CEO of Farisha Hijab Sdn Bhd insisted on further investigation to be carried out that he also required Mr Muaz to conduct the analysis of variance for the material and labour of the...
Let $\tau$ be a stopping time for the filtration $\left(\mathscr{F}_{t}ight)_{t \geqslant 0}$. Show that a) \(F \in \mathscr{F}_{\tau+} \Longleftrightarrow \forall t \geqslant 0: F \cap\{\tau
Define each of the following terms. a. Preferred stock b. Cumulative dividends; arrearages c. Warrant; detachable warrant d. Stepped-up price e. Convertible security f. Conversion ratio; conversion...
Define each of the following terms. a. Preferred stock b. Cumulative dividends; arrearages c. Warrant; detachable warrant d. Stepped-up price e. Convertible security f. Conversion ratio; conversion...
Is preferred stock more like bonds or common stock? Explain.
Prescott Football Manufacturing had the following operating results for 2 0 1 9 : sales = $ 3 0 , 8 2 4 ; cost of goods sold = $ 2 1 , 9 7 4 ; depreciation expense = $ 3 , 6 0 3 ; interest expense =...
On January 1, 2018, Brooks Corporation exchanged $1,259,000 fair-value consideration for all of the outstanding voting stock of Chandler, Inc. At the acquisition date, Chandler had a book value equal...
1. Determine the value of the right to use asset and lease liability at commencement of the lease.

Payday loans are very short-term loans that charge very high interest rates. You can borrow $500 today

Question:

Step by Step Answer:

18 percent for two week...View the full answer

Finance Applications and Theory

Students also viewed these Finance questions