**PLEASE SHOW HOW TO GET EXACT CALCULATIONS WITH EXCEL (EXCEL FORMULAS) - THANK YOU! I WILL GIVE GOOD RATING WITH THE FORMULAS.

Payday lenders are firms that make short-term (often one- to two-week) loans to consumers. The intent is to provide households with some extra cash in advance of the next paycheck. An example of such a lender is Check`n Go. The loan terms of these loans can be found in the last page of this assignment. According to the loan terms of Checkn Go, if you obtain a two-week loan of $500, in two weeks

(i.e., 14 days), you have to repay $555.

(a) What is your two-week interest charge expressed as a percentage of the loan received? (i.e., your periodic interest rate over the 14-day period)?

(b) If the interest is compounded every 14 days, how many compounding periods do you have in one year (assuming 365 days in a year)?1 Using this number of compounding periods and the periodic rate for the 14-day loan you found in (a), show how Checkn Go arrived at the APR that the firm reported for the $500 loan.

(c) Using the number of compounding periods and the APR that you found in (b), find the Effective Annual Rate (EAR) on this borrower-friendly loan. As in (b), interest is compounded every 14 days and there are 365 days in a year. Why is this rate higher/lower than APR?

(d) Suppose Check'n Go charges the same APR as it does right now for a $500 loan, but changes its compounding frequency to daily. Assuming daily compounding (365 days in a year) and the APR stated in (b), what would be the EAR on this loan?