Question: The check - cashing store also makes one - month add - on interest loans at 7 . 8 percent discount interest per week. Thus

The check-cashing store also makes one-month add-on interest loans at 7.8 percent discount interest per week. Thus if you borrow $200 for one month (four weeks), the interest will be ($2001.0784)=$70.09$2001.0784=$70.09. Because this is discount interest, your net loan proceeds today will be $129.91. You must then repay the store $200 at the end of the month. To help you out, though, the store lets you pay off this $200 in installments of $50 per week. What is the APR of this loan? What is the EAR?
Note:Do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g.,32.16.)

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer
Step: 1 Unlock blur-text-image
Question Has Been Solved by an Expert!

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

Step: 2 Unlock
Step: 3 Unlock

Students Have Also Explored These Related Finance Questions!