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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 $185 payday loan (when you repay the loan, you pay $215). What is the effective annual interest rate for this loan? (Assume 26 bi-weekly periods per year.) The effective annual interest rate is %. (Round to two decimal places.)

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 $185 payday loan (when you repay the loan, you pay $215). What is the effective annual interest rate for this loan? (Assume 26 bi-weekly periods per year.) The effective annual interest rate is %. (Round to two decimal places.)

Essentials Of Investments
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
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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 $185 payday loan (when you repay the loan, you pay $215). What is the effective annual interest rate for this loan? (Assume 26 bi-weekly periods per year.) The effective annual interest rate is %. (Round to two decimal places.) Enter your answer in the answer box and then click Check Answer. Clear All Check Answer All parts showing
Transcribed Image Text: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 $185 payday loan (when you repay the loan, you pay $215). What is the effective annual interest rate for this loan? (Assume 26 bi-weekly periods per year.) The effective annual interest rate is %. (Round to two decimal places.) Enter your answer in the answer box and then click Check Answer. Clear All Check Answer All parts showing
Question Help In 1975, interest rates were 7.85% and the rate of inflation was 12.3% in the United States. What was the real interest rate in 1975? How would the purchasing power of your savings have changed over the year? (Note: Be careful not to round any intermediate steps less than six decimal places.) What was the real interest rate in 1975? Real rate of interest in 1975 was %. (Round to two decimal places.) Enter your answer in the answer box and then click Check Answer. 1 part remaining Clear All Check Answer
Transcribed Image Text:Question Help In 1975, interest rates were 7.85% and the rate of inflation was 12.3% in the United States. What was the real interest rate in 1975? How would the purchasing power of your savings have changed over the year? (Note: Be careful not to round any intermediate steps less than six decimal places.) What was the real interest rate in 1975? Real rate of interest in 1975 was %. (Round to two decimal places.) Enter your answer in the answer box and then click Check Answer. 1 part remaining Clear All Check Answer
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