For a one-month payday loan of $200, suppose the origination and servicing cost is $5, and r=.01 (per month). If the risk of default is 5% and the recovery rate is 10%, then what is the dollar fee required to provide the lender with their required expected return? Use the formula from the chapter.

Question 3 options:

$17.74

$18.26

$15.89

$14.57

$16.43

$17.11