SOLUTION: A payday loan company charges a $65 fee for a $700 payday loan that will be repaid in 10 days. Treating the fee as interest paid, what is the equivalent annual rate? ( Round to the
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Question 1181211: A payday loan company charges a $65 fee for a $700 payday loan that will be repaid in 10 days. Treating the fee as interest paid, what is the equivalent annual rate? ( Round to the nearest percent. This will be over 100%)
Answer by greenestamps(13200) (Show Source): You can put this solution on YOUR website!
The interest rate for the 10 days is 65/700 converted to a percent:
= about 9.3%
The interest rate per day is one-tenth of that.
Multiply that interest rate per day by either 360 or 365, depending on your ground rules; then round as directed.
Your answer should be around 330%.
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