Question

In: Finance

Friendly's Quick Loans, Inc., offers you $7.50 today but you must repay $9.35 when you get your paycheck in one week (or else).

Friendly's Quick Loans, Inc., offers you $7.50 today but you must repay $9.35 when you get your paycheck in one week (or else).

Requirement 1:

If you were brave enough to ask, what APR would Friendly's say you were paying?

(Round answer as directed, but do not use rounded numbers in intermediate calculations. Enter your answer as a percent rounded to 2 decimal places (e.g.. 32.16).)

Annual percentage rate _________%

Solutions

Expert Solution

APR = week interest rate*number of weeks in a year

         = ((9.35/7.50)-1)*52

          = 1282.67%

 

APR = week interest rate*number of weeks in a year

         = ((9.35/7.50)-1)*52

          = 1282.67%

 

APR = week interest rate*number of weeks in a year

         = ((9.35/7.50)-1)*52

          = 1282.67%

Umair answered 1 year ago
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