BUSN 5200 F2 2022: Compound Frequency Payday loans are very short-term loans that charge very high interest rates. You can borrow $500 today and repay $550 in two weeks. What is the compound annual rate implied by this 10 percent rate charged for only two weeks?

Posted: December 23rd, 2022

Compound Frequency Payday loans are very short-term loans that charge very high interest rates. You can borrow $500 today and repay $550 in two weeks. What is the compound annual rate implied by this 10 percent rate charged for only two weeks?

110.50 percent

1091.78 percent

(1 + 0.10)^26 – 1 = 1091.78 percent

10.50 percent

12.00 percent

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