Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
Related questions
Question
Transcribed Image Text:Big Dom's Pawn Shop charges an interest rate of 17 percent per month on loans to its
customers. Like all lenders, Big Dom must report an APR to consumers.
a. What rate should the shop report?
APR
204.00%
EAR
204.00%
17.00%
199.92%
193.80%
b. What is the effective annual rate?
530.11%
558.01%
204.00%
18.39%
116.50%
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