why in below question at part a) for n , write used '1' ? I though n is number of years and it should be 2/56 ( 1 year is 56 weeks) in part c, I do not undrestand the question either please solve part c and why in part a we put 1 becasue loaning period was 2 weeks not 1 year, and my third question is in F = P ( 1+i)^n , what kind of interest rate i is? nominal per year or nominal compound or effective?

A payday lender lends money on the following terms: "If I give you $100 today, you will write check for $120, which you will redeem or I will cash on your next payday." Noting that ee me a calculated rates would be even higher for closer paydays, assume that the payday is twow away (a) What nominal interest rate per year (r) is the lender charging? (b) What effective interest rate per year (ia) is the lender charging? (c) If the lender started with $100 and was able to keep it, as well as all the money received, loaned out at all times, how much money does the lender have one year? at the end of 93 Nominal and Effective Interest SOLUTION TO PART a F PF/P, i,n) 120 =: 100(F/P, i I ) Therefore,-20% per 2-week period Nominal interest rte per year 26 0.20 5.20 520%