Question

Which will have a higher effective interest rate - a payday loan for $1500 thatis due in 12 days with a fee of $90, or a payday loan for $1500 that is due in10 days with a fee of $90?аaO A. A payday loan for $1500 that is due in 12 days with a fee of $90,since it has the longer periodO B. A payday loan for $1500 that is due in 12 days with a fee of $90,since it has the shorter periodоC. A payday loan for $1500 that is due in 10 days with a fee of $90,since it has the longer periodD. A payday loan for $1500 that is due in 10 days with a fee of $90,since it has the shorter period

Answer 1

Both payday loans have the same fee of $90 for the same amount of money, the only difference is the number of days, for the first one is 12 days and for the second one is 10 days. Therefore we can conclude that the higher effective interest rate will be for the payloan for $1500 that is due in 10 days with a fee of $90 since it has the shorter period.