1. A small financial services company, Chex, will contract with any employee of a local, manufacturing company, Broomz, such that the employee will promise to give $20, up to one week in advance of pay day, for every $100 borrowed, up to a loan amount of 50% of the weekly average paycheck. In exchange for this promise, and a forward-dated check for $120 for each $10 borrowed, Chex will give an advance of cash. If an employee uses the Chex cash-advance services one week in advance of pay day, and borrows $500, what is:

The Annual Percentage Rate (APR)?

If the employee does this Every week of the year, what would be The Effective Annual Rate (EAR)?

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