The Premier Car Title Loan Company makes emergency loans of up to $500 for 1 month for a fee of 4% of the loan amount. If a person borrows $500, what is (a) the nominal interest rate per year, and (b) the effective rate per year?

What will be an ideal response?


(a) Interest rate per month = 4%
r = (0.04)(12)
= 48% per year
(b) i a = (1 + 0.48/12) 12 – 1
= 60.1% per year

Trades & Technology

You might also like to view...

If a PV system is utility interconnected but also has battery back-up to power loads when the grid is down a(n) ____________________ inverter needs to be specified.

Fill in the blank(s) with the appropriate word(s).

Trades & Technology

Motors are used in the industry to rotate compressors, condenser fan motors, pumps, and other devices that require rotating movement.

Answer the following statement true (T) or false (F)

Trades & Technology

There is about a ____ percent difference in DNA between the human X and Y chromosomes

a. 7.5 c. 3.2 b. 3.8 d. 2.8

Trades & Technology

The three phases of the swine industry are ____________________, growing, and finishing

Fill in the blank(s) with correct word

Trades & Technology