Question
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)
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