Compound Frequency Payday loans are very short-term loans that charge very high interest rates. You can borrow $1,400 today and repay $1,666 in two weeks. What is the compound annual rate implied by this 19 percent rate charged for only two weeks?

Compound Frequency Payday loans are very short-term loans that charge very high interest rates. You can borrow $1,400 today and repay $1,666 in two weeks. What is the compound annual rate implied by this 19 percent rate charged for only two weeks?

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Compound Frequency Payday loans are very short-term loans that charge very high interest rates. You can borrow $1,400 today and repay $1,666 in two weeks. What is the compound annual rate implied by this 19 percent rate charged for only two weeks?

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