In the state of Iowa, payday loans are legal with finance fees of a maximum of $15 on the first $100 loaned, $10 on each $100 thereafter, and a maximum term of 31 days. See, for example: 1. A person borrows $300 and intends to pay back the loan in two weeks. a. What would be the finance charge due then? (Assume the maximum fee is in force.) b. What would be the effective interest rate of the loan in the two-week period? c. Assuming 52 weeks in a year, what would be the effective annual interest rate of the loan? d. Convert the effective annual interest rate to a monthly rate and then report the APR of the loan? Reflect on this value.

2. Now consider an example from the state of Nebraska. In June 2020, the ballot measure was passed with 82% support which limited interest rates to an APR of 36%. See for example: a. If the max APR is 36%, find the maximum effective annual interest rate. b. Assume there are 52 weeks in a year and compute an effective two-week period interest rate. c. What would be the fee (the interest) due on a $300 loan over a two-week period?