SOLUTION: You have agreed to loan some money to a friend at a simple interest rate of 100% which is outrageous but still about half of the payday loan places! To make it easy on your friend

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Question 1122742: You have agreed to loan some money to a friend at a simple interest rate of 100% which is outrageous but still about half of the payday loan places! To make it easy on your friend who never took Math 140 you tell him you'll give him some money now and he just needs to pay you back a nice even $700 in 2 weeks. How much money do you hand him?
$
(nearest $1)
Answer by greenestamps(13200) About Me  (Show Source):
You can put this solution on YOUR website!


The 100% interest rate is an annual rate; it means the value of the loan doubles in a year.

2 weeks is 1/26 of a year; so the value of the loan will grow by a factor of 2^(1/26). So if x is the amount of the loan, then

x%282%5E%281%2F26%29%29+=+700
x+=+700%2F%282%5E%281%2F26%29%29

Use a calculator....