Leigh’s parents were in an auto accident and she needed quick money to fly home. She didn’t have enough in her account to pay for the $800 plane ticket or own a credit card. She hastily made the decision to stop in a title loan office. She gave them the title of her car as collateral to secure her 30 day loan of $1,000 at an interest rate of 18%. She had a processing fee of $50 and a mandatory roadside service fee of $75. Her parents ended up being hospitalized for 3 months. Leigh, tending to matters at home, extended the short term loan twice more, paying only the interest for the first three months. (Fees repeated with each roll over). At the end of three months, her parents were home from the hospital and she shared with them her financial situation.

a. If they were to pay off the loan in full after three months, what did the loan end up actually costing?

b. What was the resulting APR? 

c. Does Leigh have any other alternatives at this point?

d. What would have been alternative option for funding the airline ticket on such short notice?