Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

1. Cecy does not have an emergency fund and needs to pay for food to feed her family, so she decides to take out a

1. Cecy does not have an emergency fund and needs to pay for food to feed her family, so she decides to take out a payday loan. She takes out a loan with GET MONEY NOW: LENDING for $498, and is expected to pay back that total in 2 weeks when she gets her next paycheck. In addition, she needs to pay a fee of $57 the day the loan is due. What is the APR on Cecy's Loan? (Hint: The A in APR stands for "Annual" so 2 weeks - or 14 days - is in proportion to the full 365 day year)

2. Stacy is in a similar situation to Cecy, but she lives in a state where interest rates are capped. In her state, payday loans cannot have above a 82% APR. Stacy takes out a loan with WE HAVE THE MONEY YOU NEED: LENDING for $404 at the state enforced APR cap. The money is due in 2 weeks along with a fee. What is the value of that fee?

(Hint: To calculate with percentages, they need to be in decimal form)

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Master The Art Of House Flipping

Authors: Livia V. Velez

1st Edition

979-8865806561

More Books

Students also viewed these Finance questions