Question
Your local loan shark offers weekly payday loans: You can borrow $1,000 and pay back $1,030 one week later (or lose a finger or two).
Your local loan shark offers weekly payday loans: You can borrow $1,000 and pay back $1,030 one week later (or lose a finger or two).
Attempt 1/5 for 10 pts.
Part 1
What is the APR (the simple rate) on the loan?
(Assume that there are exactly 52 weeks in a year, and remember to state the result in "decimal" form, not as a percent.)
Answer: 1.56
Part 2
What is the effective annual rate on the loan? Again assume that there are exactly 52 weeks in the year, and state the rate in decimal form.
Answer?
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Marketing For Financial Advisors
Authors: Eric Bradlow, Keith Niedermeier, Patti Williams
1st Edition
0071605142, 978-0071605144
