document.write( "Question 1121810: A payday loan company charges a $25 fee for a $500 payday loan that will be repaid in 14 days.\r
\n" ); document.write( "\n" ); document.write( "Treating the fee as interest paid, what is the equivalent annual interest rate? \n" ); document.write( "
Algebra.Com's Answer #737974 by Theo(13342)\"\" \"About 
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the loan is 500 dollars and has to be paid back in 14 days.
\n" ); document.write( "the fee is 25 dollars.\r
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\n" ); document.write( "\n" ); document.write( "if this is a simple interest loan, then the interest rate would be calculated using the following formula.\r
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\n" ); document.write( "\n" ); document.write( "25 = 500 * r * n\r
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\n" ); document.write( "\n" ); document.write( "25 is the interest
\n" ); document.write( "500 is the principal
\n" ); document.write( "r is the interest rate per day.
\n" ); document.write( "n is the number of days.\r
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\n" ); document.write( "\n" ); document.write( "since n = 14, the formula becomes 25 = 500 * r * 14.\r
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\n" ); document.write( "\n" ); document.write( "solve for r to get r = 25 / 500 / 14 = .0035714286 per day.\r
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\n" ); document.write( "\n" ); document.write( "if there are 365 days in a year, then the interest rate for the whole year would be .0035714286 * 365 = 1.203571429, or 120.36% rounded to 2 decimal places.\r
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