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

Algebra ->  Finance -> 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      Log On


   

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) About Me  (Show Source):
You can put this solution on YOUR website!


The interest rate for the 10 days is 65/700 converted to a percent:

%2865%2F700%29%2A100 = 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%.