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lisabon 2012 [21]
3 years ago
8

Friendly’s Quick Loans, Inc., offers you $8.25 today but you must repay $10.45 when you get your paycheck in one week (or else).

What is the effective annual return Friendly’s earns on this lending business? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) Effective annual return 1,386.67 % If you were brave enough to ask, what APR would Friendly’s say you were paying? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) Annual percentage rate
Business
1 answer:
Ivahew [28]3 years ago
3 0

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:

= \frac{Interest\ for\ a\ week}{Loan\ Amount}\times100

= \frac{2.2}{8.25}\times100

= 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%.  

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Answer:

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Explanation:

Giving the following information:

Purchase price= $115,000

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Annual depreciation= (original cost - salvage value)/estimated life (years)

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5 0
3 years ago
Assume that the risk-free rate of interest is 5% and the expected rate of return on the market is 17%. A share of stock sells fo
Ugo [173]

Answer:

New price (P1) = $72.88

Explanation:

Given:

Risk-free rate of interest (Rf) = 5%

Expected rate of market return (Rm) = 17%

Old price (P0) = $64

Dividend (D) = $2

Beta (β) = 1.0

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Expected rate on return (r) = Rf + β(Rm - Rf)

Expected rate on return (r) = 5% + 1.0(17% - 5%)

Expected rate on return (r) = 5% + 1.0(12%)

Expected rate on return (r) = 5% + 12%

Expected rate on return (r) = 17%

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Expected rate on return (r) = (D + P1 - P0) / P0

17% = ($2 + P1 - $64) / $64

0.17 = (2 + P1 - $64) / $64

10.88 = P1 - $62

New price (P1) = $72.88

7 0
3 years ago
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Answer:

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3 0
3 years ago
What is a whistleblower?
Vesnalui [34]
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4 0
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Read 2 more answers
A Treasury bond due in one year has a yield of 5.7%; a Treasury bond due in 5 years has a yield of 6.2%. A bond issued by Ford d
SVETLANKA909090 [29]

Answer:

d. 0.8% and 1.3%.

Explanation:

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7 0
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