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
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