Homework Help is Here – Start Your Trial Now!
Business
Finance
one week (or else). a. If you were brave enough to ask, what APR would Friendly's say you (Do not round intermediate calculations and enter your answer rounded to 2 decimal places, e.g., 32.16.) b. What's the effective annual return Friendly's earns on this lending busin round intermediate calculations and enter your answer as a percent r decimal places, e.g., 32.16.) a. APR b. EAR 15.76 % 17.04 %

one week (or else). a. If you were brave enough to ask, what APR would Friendly's say you (Do not round intermediate calculations and enter your answer rounded to 2 decimal places, e.g., 32.16.) b. What's the effective annual return Friendly's earns on this lending busin round intermediate calculations and enter your answer as a percent r decimal places, e.g., 32.16.) a. APR b. EAR 15.76 % 17.04 %

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
Problem 1PS
See similar textbooks
icon
Related questions
Question
100%
E13
-S aw 11 Friendly's Quick Loans, Incorporated, offers you "$3.30 for $4.30 or I knock on your door." This means you get $3.30 today and repay $4.30 when you get your paycheck in one week (or else). a. If you were brave enough to ask, what APR would Friendly's say you were paying? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) b. What's the effective annual return Friendly's earns on this lending business? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) a. APR b. EAR * 80 15.76 % 17.04 % 000 000 < Prev 13 of 15 MacBook Pro Next >
Transcribed Image Text:-S aw 11 Friendly's Quick Loans, Incorporated, offers you "$3.30 for $4.30 or I knock on your door." This means you get $3.30 today and repay $4.30 when you get your paycheck in one week (or else). a. If you were brave enough to ask, what APR would Friendly's say you were paying? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) b. What's the effective annual return Friendly's earns on this lending business? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) a. APR b. EAR * 80 15.76 % 17.04 % 000 000 < Prev 13 of 15 MacBook Pro Next >
Expert Solution
Step 1

The APR is just like nominal interest rate without compounding but effective interest rate is after considering the impact of compounding.

steps

Step by step

Solved in 2 steps

SEE SOLUTIONCheck out a sample Q&A here
Blurred answer
Knowledge Booster
Cost of Credit
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, finance and related others by exploring similar questions and additional content below.
Recommended textbooks for you
Essentials Of Investments
Essentials Of Investments
Finance
ISBN:
9781260013924
Author:
Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:
Mcgraw-hill Education,
FUNDAMENTALS OF CORPORATE FINANCE
FUNDAMENTALS OF CORPORATE FINANCE
Finance
ISBN:
9781260013962
Author:
BREALEY
Publisher:
RENT MCG
Financial Management: Theory & Practice
Financial Management: Theory & Practice
Finance
ISBN:
9781337909730
Author:
Brigham
Publisher:
Cengage
Foundations Of Finance
Foundations Of Finance
Finance
ISBN:
9780134897264
Author:
KEOWN, Arthur J., Martin, John D., PETTY, J. William
Publisher:
Pearson,
Fundamentals of Financial Management (MindTap Cou…
Fundamentals of Financial Management (MindTap Cou…
Finance
ISBN:
9781337395250
Author:
Eugene F. Brigham, Joel F. Houston
Publisher:
Cengage Learning
Corporate Finance (The Mcgraw-hill/Irwin Series i…
Corporate Finance (The Mcgraw-hill/Irwin Series i…
Finance
ISBN:
9780077861759
Author:
Stephen A. Ross Franco Modigliani Professor of Financial Economics Professor, Randolph W Westerfield Robert R. Dockson Deans Chair in Bus. Admin., Jeffrey Jaffe, Bradford D Jordan Professor
Publisher:
McGraw-Hill Education
SEE MORE TEXTBOOKS