SOLUTION: The Payday Loan Company lends you $500. After 2 weeks you pay back $520. What is the simple interest rate? Note that the time is a fraction of a year.

Question 781932: The Payday Loan Company lends you $500. After 2 weeks you pay back $520. What is the simple interest rate? Note that the time is a fraction of a year.
Answer by stanbon(75887) (Show Source): You can put this solution on YOUR website!
The Payday Loan Company lends you $500. After 2 weeks you pay back $520. What is the simple interest rate? Note that the time is a fraction of a year.
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A(t) = P(1+rt)
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520 = 500(1+r(2/52))
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1.04 = 1+0.0385r
0.0385r = 0.04
r = 1.039 = 103.9%
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Cheers,
Stan H.
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