Friendlys Quick Loans, Inc., offers you twelve for seventeen or I knock on your door. This means
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Question:
Friendly’s Quick Loans, Inc., offers you “twelve for seventeen or I knock on your door.” This means you get $12 today and repay $17 when you get your paycheck in one week (or else). | |
a. | If you were brave enough to ask, what APR would Friendly’s say you were paying? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) |
b. | What’s the effective annual return Friendly’s earns on this lending business? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) |
Related Book For
Fundamentals Of Corporate Finance
ISBN: 9781265553609
13th Edition
Authors: Stephen Ross, Randolph Westerfield, Bradford Jordan
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