It is still three weeks until payday and you have run out of cash. You have just received an advertisement from The Money Shop offering a payday loan for 21 days. You can borrow $500 for only $19.99. The fee of $19.99 is payable when you repay the loan. What is the effective annual rate of interest? Answer: 97.7%
It is still three weeks until payday and you have run out of cash. You have just received an advertisement from The Money Shop offering a payday loan for 21 days. You can borrow $500 for only $19.99. The fee of $19.99 is payable when you repay the loan. What is the effective annual rate of interest? Answer: 97.7%
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
Problem 1PS
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It is still three weeks until payday and you have run out of cash. You have just received an advertisement from The Money Shop offering a payday loan for 21 days. You can borrow $500 for only $19.99. The fee of $19.99 is payable when you repay the loan. What is the effective annual rate of interest?
Answer: 97.7%
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