Hey payday loan company charges a $60 fee for a $500 payday loan that will be repaid in 15 days. Treating the fee as interest paid what is the equivalent annual interest rate? round to the nearest percent
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Expert's answer
2019-05-27T13:03:43-0400
Treating the fee as interest paid and using simple interest formula the equivalent annual interest rate is:
r = I/(P×t) = $60/(500×15/365)×100% = 292% per year.
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