Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Now suppose the store makes one-week loans at 6.7 percent discount interest per week. Whats the APR now? The EAR? (Round your answers to 2

Now suppose the store makes one-week loans at 6.7 percent discount interest per week. Whats the APR now? The EAR? (Round your answers to 2 decimal places. (e.g., 32.16)) Annual percentage rate---- % Effective annual rate ---- % C) The check-cashing store also makes one-month add-on interest loans at 6.7 percent discount interest per week. Thus if you borrow $200 for one month (four weeks),the interest will be ($200 1.0674 ) 200 = $59.23. Because this is discount interest, your net loan proceeds today will be $140.77. You must then repay the store $200 at the end of the month. To help you out, though, the store lets you pay off this $200 in installments of $50 per week. What is the APR of this loan? What is the EAR? (Round your answers to 2 decimal places. (e.g., 32.16)) Annual percentage rate----- % Effective annual rate ---- %

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Revealing The Invisible How Our Hidden Behaviors Are Becoming The Most Valuable Commodity Of The 21st Century

Authors: Thomas Koulopoulos ,George Achillias

1st Edition

1682616193, 978-1682616192

More Books

Students also viewed these Finance questions