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17 March, 10:36

Mackenzie took out a payday loan for $1100 that charged a $95 fee. If the loan matures in 2 weeks, what is the approximate effective interest rate of the loan?

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  1. 17 March, 12:37
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    We are asked to solve for the approximate effective interest rate of the loan and the given values are:

    Payday load = $1100

    Charge fee = $95

    Solving for interest we have:

    % interest = $95/$1100

    % interest = 8.64 %

    The answer to the problem is 8.64%.
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