Question
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
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?(Do not round intermediate calculations. Enter your answers as a percent rounded to 2 decimal places, e.g., 32.16.) |
Annual percentage rate | % |
Effective annual rate | % |
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