the industry has said will put it out of business. Payday lenders typically charge $20 per $100 for two-week loans backed by borrower's car title or next paycheck. That amounts to 1.43 percent interest per an annual rate of 521 percent. The cap translates to a daily interest rate of about 0.1 percent, or total int charges of $1.38-a dime a day-on a $100, two-week loan. [R226] What is a "payday loan"? ne of toodabronqe tedt ai dat oge erify the computation that 1.43% interest per day is 521% interest annually.
the industry has said will put it out of business. Payday lenders typically charge $20 per $100 for two-week loans backed by borrower's car title or next paycheck. That amounts to 1.43 percent interest per an annual rate of 521 percent. The cap translates to a daily interest rate of about 0.1 percent, or total int charges of $1.38-a dime a day-on a $100, two-week loan. [R226] What is a "payday loan"? ne of toodabronqe tedt ai dat oge erify the computation that 1.43% interest per day is 521% interest annually.
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
Related questions
Question
![New Hampshire is giving payday lenders the gong as it rings in the new year. A law
that takes effect today caps the interest rate on small loans at 36 percent a year, which
the industry has said will put it out of business.
Payday lenders typically charge $20 per $100 for two-week loans backed by the
borrower's car title or next paycheck. That amounts to 1.43 percent interest per day,
an annual rate of 521 percent.
The cap translates to a daily interest rate of about 0.1 percent, or total interest
charges of $1.38-a dime a day on a $100, two-week loan. [R226]
(a) What is a "payday loan"?
songe tact ci det oge
(b) Verify the computation that 1.43% interest per day is 521% interest annually.
(c) If the 1.43% daily interest is compounded daily then the true annual rate of interest
W [2]
[2] SI 0.01 20
fact much more than 521%. How much is it? of vaq asdorsm](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fbc8d5fe8-c51e-4914-8d45-6bcdd10da2fd%2Fbb839fb9-5e45-45f5-9c08-e444f581d8f1%2Fvduc03g_processed.jpeg&w=3840&q=75)
Transcribed Image Text:New Hampshire is giving payday lenders the gong as it rings in the new year. A law
that takes effect today caps the interest rate on small loans at 36 percent a year, which
the industry has said will put it out of business.
Payday lenders typically charge $20 per $100 for two-week loans backed by the
borrower's car title or next paycheck. That amounts to 1.43 percent interest per day,
an annual rate of 521 percent.
The cap translates to a daily interest rate of about 0.1 percent, or total interest
charges of $1.38-a dime a day on a $100, two-week loan. [R226]
(a) What is a "payday loan"?
songe tact ci det oge
(b) Verify the computation that 1.43% interest per day is 521% interest annually.
(c) If the 1.43% daily interest is compounded daily then the true annual rate of interest
W [2]
[2] SI 0.01 20
fact much more than 521%. How much is it? of vaq asdorsm
Expert Solution
Step 1
In daily life some time we need cash money very urgently and but we don't have that so due to which the payday loans are very common now days.
Step by step
Solved in 2 steps
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