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Payday loans are very short-term loans that charge very high interest rates. You can borrow $500 today and repay $590 in two weeks. What is the compounded annual rate implied by this 18 percent rate charged for only two weeks

Respuesta :

If $500 is borrowed and in two (2) weeks it attracted the interest percentage of $90

It therefore means, borrowing $500 for a month

= $90×2 = $180 ==== 1 Month

Therefore $180 × 12 (A year)

=$2,160 + $6000

= $8,160

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