Question: A payday loan is structured to obscure the true interest rate you are paying. For example, in Washington, you pay a $30 fee for a

A payday loan is structured to obscure the true interest rate you are paying. For example, in Washington, you pay a $30 "fee" for a two-week $200 payday loan (when you repay the loan, you pay $230). What is the effective annual interest rate for this loan?

Step by Step Solution

★★★★★

3.48 Rating (164 Votes )

There are 3 Steps involved in it

1 Expert Approved Answer

Step: 1 Unlock

The fee is just an interest payment If you pay 3... View full answer

Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock

Step: 3 Unlock

Document Format (1 attachment)

1080-B-C-F-S(805).docx

120 KBs Word File

Students Have Also Explored These Related Corporate Finance Questions!

Assume that your local bank gives you a $1,000 loan at 10% per year but deducts the interest in advance. Is 10% the real rate of interest that you will pay? How can the true interest rate be...

A finance company offers you a loan of $8,000 for two years. Interest of $1,500 on the loan is subtracted from the loan proceeds immediately. What is the bank discount rate on the loan? What is the...

Your firm is considering two one-year loan options for a $500,000 loan. The first carries fees of 2% of the loan amount and charges interest of 4% of the loan amount. The other carries fees of 1% of...

11. A payday loan is structured to obscure the true interest rate you are paying. For example, in Washington, you pay a $30 fee for a two-week $200 payday loan (when you repay the loan, you pay...

9. A payday loan is structured to obscure the true interest rate you are paying. For example, in Washington, you pay a $30 "fee" for a two-week $200 payday loan (when you repay the loan, you pay...

A payday loan is structured to obscure the true interest rate you are paying. For example, in Washington, you pay a $33 fee for a two-week $200 payday loan (when you repay the loan, you pay $233)....

A payday loan is structured to obscure the true interest rate you are paying. Forexample, inWashington, you pay a $ 26 $26 "fee" for atwo-week $ 200 $200 payday loan(when you repay theloan, you pay $...

A payday loan is structured to obscure the true interest rate you are paying. For example, in Washington, you pay a $28 "foo" for a fwo-week $220 paydoy loan (when you repay the loan, you pay \$248)....

A payday loan is structured to obscure the true interest rate you are paying. For example, in Washington, you pay a $27 "fee" for a two-week $185 payday loan (when you repay the loan, you pay $212)...

A payday loan is structured to obscure the true interest rate you are paying. For example, in Washington, you pay a $26 "fee" for a two-week $190 payday loan (when you repay the loan, you pay $216 )....

Assuming everything else remained constant, what would happen to the line width and line depth of a voxel if the power were decreased? If the scanning speed were decreased?

Su Chan manages a popular restaurant called the Bungalow. Her P&L for the month of March is as follows. Su has a meeting with the owner of the Bungalow next week, so she decided to create a pie chart...

71. Small Business Failures. A regional director responsible for business development in the state of Pennsylvania is concerned about the number of small business failures. If the mean number of...

How should corporations address the questionofwhistle-blowing?Howshould theydealwithwhistle-blowersorpotential whistle-blowers?Howshouldtheyhandle disgruntledemployeeswhomake inaccu...

You have a portfolio with a standard deviation of 30% and an expected return of 18%. You are considering adding one of the two stocks in the table below. If after adding the stock you will have 20%...

Your client has $100,000 invested in stock A. She would like to build a two-stock portfolio by investing another $100,000 in either stock B or C. She wants a portfolio with an expected return of at...

Suppose all possible investment opportunities in the world are limited to the five stocks listed in the table below. What are the market portfolio weights Price/Share (S) 10 20 Number of Shares...

i need correct answrrs 6 1 2 .

LastHW-Q7 Suppose the Japanese yen exchange rate is 76.47 = $1, and the British pound exchange rate is 1 = $1.56. {Enter your answer as directed, but do not round intermediate calculations.)...

The manager of a company is interested in finding the impact hours of training for the employers, and their IQ on their job skills. The employees have taken a test to find out their job skills. Data...