Question
Bobs Pawn Shop charges an interest rate of 32 percent per month on loans to its customers. Like all lenders, Bob must report an APR
Bobs Pawn Shop charges an interest rate of 32 percent per month on loans to its customers. Like all lenders, Bob must report an APR to consumers. What rate should the shop report? What is the effective annual rate?
One of your customers is delinquent on his accounts payable balance. You've mutually agreed to a repayment schedule of $500 per month. You will charge 1.5 percent per month interest on the overdue balance. If the current balance is $18,000, how long will it take for the account to be paid off?
Live Forever Life Insurance Co. is selling a perpetuity contract that pays $1,400 monthly. The contract currently sells for $215,000. What is the monthly return on this investment vehicle? What is the APR? The effective annual return?
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