Answer:
1,386.67%
Explanation:
Loan Amount = $8.25
Repayment Amount = $10.45
Hence,
Interest for a week = Repayment Amount - Loan Amount
= $10.45 - $8.25
= $2.2
Interest percentage for a week:
=
=
= 26.66% (approx)
Number of weeks in a year = 52
Therefore,
Effective annual return:
= Interest percentage for a week × Number of weeks in a year
= 26.66% × 52
= 1,386.67%
Hence, effective annual return Friendly’s earns on this lending business is 1,386.67% .
APR you are paying 1,386.67%.