SOLUTION: limits are needed on payday-lending businesses, according to an article in the Feb. 14, 2007 issue of the Columbian. Interest rates on payday loans are so outrageous that the payd

Question 180461: limits are needed on payday-lending businesses, according to an article in the Feb. 14, 2007 issue of the Columbian. Interest rates on payday loans are so outrageous that the payday-lending industry only has itself to blame for states moving to rein them in. A typical $100 loan is payable in TWO WEEKS at $115. What is the percent interest paid on this loan? Do not round the denominator before dividing.
Answer by stanbon(75887) (Show Source): You can put this solution on YOUR website!
A typical $100 loan is payable in TWO WEEKS at $115. What is the percent interest paid on this loan?
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I = Prt
15 = 100*r*(2/52)
0.15 = r(1/26)
r = 3.9 or 390%
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Cheers,
Stan H.
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