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Compound Frequency Payday Loans Are Very Short-Term Loans That Charge

Question 66

Multiple Choice

Compound Frequency Payday loans are very short-term loans that charge very high interest rates. You can borrow $600 today and repay $675 in two weeks. What is the compound annual rate implied by this 12.5 percent rate charged for only two weeks?


A) 12.89%
B) 13.28%
C) 2037.71%
D) 113.28%

Correct Answer:

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