Question
Friendlys Quick Loans, Inc., offers you $5.75 today but you must repay $6.75 when you get your paycheck in one week (or else). Requirement 1:
Friendlys Quick Loans, Inc., offers you $5.75 today but you must repay $6.75 when you get your paycheck in one week (or else). |
Requirement 1: |
What is the effective annual return Friendlys earns on this lending business? (Round your answer as directed, but do not use rounded numbers in intermediate calculations. Enter your answer as a percent rounded to 2 decimal places (e.g., 32.16).) |
Effective annual return | % |
Requirement 2: |
If you were brave enough to ask, what APR would Friendlys say you were paying? (Round answer as directed, but do not use rounded numbers in intermediate calculations. Enter your answer as a percent rounded to 2 decimal places (e.g., 32.16).) |
Annual percentage rate | % |
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started