Question

will fan and medal!
Can somebody help me solve this with an explanation please!!
What is the APR of a payday loan for $1100 due in 5 days that charges a $165 fee?

Answer 1

@perl

Answer 2

the borrower receives $1100 today, and must pay $1265 in 5 days

Answer 3

how many 5 day periods are in a 365 day year?

Answer 4

its a little more involved

Answer 5

so 73?

Answer 6

365/5 = 73 periods of 5 days in a year.

73 * $165 = $12,045 total interest in a year (if he kept that rate in 5 days)

Answer 7

but then how would we find the percentage?

Answer 8

12,045 / 1100 = 10.95 = 10.95 * 100 %

Answer 9

1095% APR

Answer 10

thank you so much i will refer to this every time i come across a question like this!!

Answer 11

life saver like for reals!