Payday loans are very short-term loans that charge very high interest rates. You can borrow $200 today and repay $260 in two weeks. What is the compounded annual rate implied by this 30 percent rate charged for only two weeks? (Hint: Compound the 2-week return 26 times for the annual return.) (Do not round intermediate calculations and round your final answer to the nearest whole percent.) Answer is complete but not entirely correct. Compounded annual rate 26 %
Payday loans are very short-term loans that charge very high interest rates. You can borrow $200 today and repay $260 in two weeks. What is the compounded annual rate implied by this 30 percent rate charged for only two weeks? (Hint: Compound the 2-week return 26 times for the annual return.) (Do not round intermediate calculations and round your final answer to the nearest whole percent.) Answer is complete but not entirely correct. Compounded annual rate 26 %
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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Transcribed Image Text:Payday loans are very short-term loans that charge very high interest rates. You can borrow $200 today and repay $260 in
two weeks. What is the compounded annual rate implied by this 30 percent rate charged for only two weeks? (Hint:
Compound the 2-week return 26 times for the annual return.) (Do not round intermediate calculations and round your final
answer to the nearest whole percent.)
Answer is complete but not entirely correct.
Compounded annual
rate
26
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