Question
A payday loan is structured to obscure the true interest rate you are paying. For example, in Washington, you pay a $25 fee for a
A payday loan is structured to obscure the true interest rate you are paying. For example, in Washington, you pay a
$25 "fee" for a two-week $195 payday loan (when you repay the loan, you pay $220).
What is the effective annual interest rate for this loan? Assume 26 bi-weekly periods per year.
(Note: Round your calculation of the the two-week interest rate to at least five decimal places.)
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Analysis For Financial Management
Authors: Robert C. Higgins
12th International Edition
1260091910, 9781260091915
