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24 February, 01:35

Student Emergency Financial Services, Inc., which makes small loans to college students, offers to lend $550. The borrower is required to pay $42 at the end of each week for 16 weeks. Find the interest rate per week. What is the nominal interest rate per year

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  1. 24 February, 01:37
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    Interest per week=17.4%

    Explanation:

    Using equation

    F=P (1+i) ^n

    where n is the time period, P is the present value and F is the future value

    Given F=550, P=42 and n=16 solving equation we will get

    i=17.4%
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