Question
The end of the month has arrived and Marina was only able to save up $175 to pay off her pay-day loan of $900.This means
The end of the month has arrived and Marina was only able to save up $175 to pay off her pay-day loan of $900.This means she will have to delay payment on the remaining $725 until next month.Besides the delayed payment fee that she is charged, she will now have to pay interest on the remaining amount.The APR (annual percentage rate) is 47%, but the interest is compounded daily.
What is the effective interest rate that Marina will actually be paying?
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Financial Markets And Institutions
Authors: Frederic S. Mishkin, Stanley G. Eakins
7th Edition
013213683X, 978-0132136839
