Homework Help is Here – Start Your Trial Now!
Business
Accounting
Payday loans (also called cash advance loans) are short-term, high-interest loans marketed as a way for people to borrow money for a short period of time until their paycheck amives. However, ke many other short-term loans, they should be used with extreme caution. Payday loans typically carry a fixed fee of $15 to $30 per $100 borrowed, and lenders sometimes demand access to wour checking account to make sure you will pay the fees. Complete parts (a) through (c) below Consider a payday loan that has a fixed fee of $17 per $100 borrowed that is due in 2 weeks (when your paycheck amives). If you borrow $800, principal) you owe the lender at the end of 2 weeks? total fee (not including your $800 $136 (Round to the nearest cent as needed) b. What is the interest rate for that 2-week period? 17% (Round to the nearest whole number as needed) What is the equivalent annual percentage rate (APR) for this loan? (Assume that there are 52 weeks in 1 year). How does this rate compare to other common types of loans, such as credit cards or mortgages? The pay-day loan has an APR of Thists [ than other common types of loans

Payday loans (also called cash advance loans) are short-term, high-interest loans marketed as a way for people to borrow money for a short period of time until their paycheck amives. However, ke many other short-term loans, they should be used with extreme caution. Payday loans typically carry a fixed fee of $15 to $30 per $100 borrowed, and lenders sometimes demand access to wour checking account to make sure you will pay the fees. Complete parts (a) through (c) below Consider a payday loan that has a fixed fee of $17 per $100 borrowed that is due in 2 weeks (when your paycheck amives). If you borrow $800, principal) you owe the lender at the end of 2 weeks? total fee (not including your $800 $136 (Round to the nearest cent as needed) b. What is the interest rate for that 2-week period? 17% (Round to the nearest whole number as needed) What is the equivalent annual percentage rate (APR) for this loan? (Assume that there are 52 weeks in 1 year). How does this rate compare to other common types of loans, such as credit cards or mortgages? The pay-day loan has an APR of Thists [ than other common types of loans

Principles of Accounting Volume 1
Principles of Accounting Volume 1
19th Edition
ISBN:9781947172685
Author:OpenStax
Publisher:OpenStax
Chapter9: Accounting For Receivables
Section: Chapter Questions
Problem 6TP: When a customer is delinquent on paying a notes receivable, your company has the option to continue...
See similar textbooks
icon
Related questions
Question
Payday loans (also called cash advance loans) are short-term, high-interest loans marketed as a way for people to borrow money for a short period of time until their paycheck arrives. However, like many other short-term loans, they should be used with extreme caution. Payday loans typically carry a fixed fee of $15 to $30 per $100 borrowed, and lenders sometimes demand access to your checking account to make sure you will pay the fees. Complete parts (a) through (c) below GSTID a. Consider a payday loan that has a fixed fee of $17 per $100 borrowed that is due in 2 weeks (when your paycheck arrives). If you borrow $800, what is the total fee (not including your $800 principal) you owe the lender at the end of 2 weeks? $136 (Round to the nearest cent as needed.) b. What is the interest rate for that 2-week period? 17% (Round to the nearest whole number as needed.) What is the equivalent annual percentage rate (APR) for this loan? (Assume that there are 52 weeks in 1 year). How does this rate compare to other common types of loans, such as credit cards or mortgages? Thists The pay-day loan has an APR of (Type an integer or a decimal.) than other common types of loans.
Transcribed Image Text:Payday loans (also called cash advance loans) are short-term, high-interest loans marketed as a way for people to borrow money for a short period of time until their paycheck arrives. However, like many other short-term loans, they should be used with extreme caution. Payday loans typically carry a fixed fee of $15 to $30 per $100 borrowed, and lenders sometimes demand access to your checking account to make sure you will pay the fees. Complete parts (a) through (c) below GSTID a. Consider a payday loan that has a fixed fee of $17 per $100 borrowed that is due in 2 weeks (when your paycheck arrives). If you borrow $800, what is the total fee (not including your $800 principal) you owe the lender at the end of 2 weeks? $136 (Round to the nearest cent as needed.) b. What is the interest rate for that 2-week period? 17% (Round to the nearest whole number as needed.) What is the equivalent annual percentage rate (APR) for this loan? (Assume that there are 52 weeks in 1 year). How does this rate compare to other common types of loans, such as credit cards or mortgages? Thists The pay-day loan has an APR of (Type an integer or a decimal.) than other common types of loans.
Expert Solution
trending now

Trending now

This is a popular solution!

steps

Step by step

Solved in 3 steps

SEE SOLUTIONCheck out a sample Q&A here
Blurred answer
Similar questions
  • SEE MORE QUESTIONS
Recommended textbooks for you
Principles of Accounting Volume 1
Principles of Accounting Volume 1
Accounting
ISBN:
9781947172685
Author:
OpenStax
Publisher:
OpenStax College
Pfin (with Mindtap, 1 Term Printed Access Card) (…
Pfin (with Mindtap, 1 Term Printed Access Card) (…
Finance
ISBN:
9780357033609
Author:
Randall Billingsley, Lawrence J. Gitman, Michael D. Joehnk
Publisher:
Cengage Learning
Personal Finance
Personal Finance
Finance
ISBN:
9781337669214
Author:
GARMAN
Publisher:
Cengage
SEE MORE TEXTBOOKS