SOLUTION: A payday loan company charges a $30 fee for a $550 payday loan that will be repaid in 15 days. Treating the fee as interest paid, what is the equivalent annual interest rate?

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Question 1174012: A payday loan company charges a $30 fee for a $550 payday loan that will be repaid in 15 days.
Treating the fee as interest paid, what is the equivalent annual interest rate?

Answer by math_helper(2461) About Me  (Show Source):
You can put this solution on YOUR website!
The raw percentage that the fee represents is:

$30/$550 = 0.0545 or 5.45%


However, since this is paid over 15 days, we still need to convert this to an annual rate (rate per day * 365):

(5.45% / 15) * 365 = +highlight%28+132.62+%29+ %