Suppose you borrow $200 from a payday lender for one week at a weekly rate of...
Suppose you borrow $200 from a payday lender for one week at a weekly rate of 10%. You'll obviously owe $220 at the end of a week. If you are unable to repay the loan, however, the lender will say that you now owe not only $220 but also 10% of that $220 at the end of the second week.
How much will you owe by the end of the second week? $
If you still can't repay any of it, how much will you owe at the end of the third week? $
Homework Answers
Amount owed at end of 2nd week = 220*(1+10%) = $242
Amount owed at the end of 3rd week = 242* (1+10%) = $266.20
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Suppose you borrow $200 from a payday lender for one week at a weekly rate of...
Suppose you borrow $200 from a payday lender for one week at a weekly rate of...
Suppose you borrow $200 from a payday lender for one week at a weekly rate of 10%. You'll obviously owe $220 at the end of a week. If you are unable to repay the loan, however, the lender will say that you now owe not only $220 but also 10% of that $220 at the end of the second week. Under this scenario, it turns out that after n weeks of not repaying anything you would owe 200 × 1.1n...
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5. Suppose you borrowed $15,000 at a rate of 8.5% and must repay it in 5 equal installments at the end of each of t...
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Payday loans are very short-term loans that charge very high interest rates. You can borrow $200 today and repay $250 in two weeks. What is the compound annual rate implied by this 25 percent rate charged for only two weeks?
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You decide to start your own company and borrow $750000. You plan to fully amortize one-half...
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