Thank you for your time and help! Show work if you can! Big Dom\'s Pawn Shop cha

Question

Thank you for your time and help! Show work if you can!

Big Dom's Pawn Shop charges an interest rate of 26.5 percent per month on loans to its customers. Like all lenders, Big Dom must report an APR to consumers. What rate should the shop report? (Do not round intermediate calcualtions. Enter your answer as a percent rounded to 1 decimal place, e.g., 32.1.) APR What is the effective annual rate? (Do not round intermediate calculations. Enter your answer asa percent rounded to 2 decimal places, e.g., 32.16.) EAR

Explanation / Answer

APR=(12*26.5)=318%

EAR=(1+APR/m)^m-1

where m=compounding periods

Hence

EAR=(1+0.265)^12-1=1579.14%(Approx).

Related Questions

Navigate

• Browse (All)
• Browse T
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.