Question

If Jayda paid $22 worth of interest on her $181 loan for 4 days from a Pay Day loan store, what is the annual interest rate she is paying? Answer:

Answer 1

Please refer to below spreadsheet for calculation and answer. Cell reference also provided.

В C 1 $22.00 2 Interest amount Pay day loan amount Loan period (days) Period interest rate Days in a year $181.00 4 4 12.15% 6 365 1109.12% Annual interest rate 8 9 LC LC 7

Cell reference -

A В C 1 Interest amount Pay day loan amount Loan period (days) Period interest rate Days in a year 2 22 181 4 4 -C2/C3 365 6 (C5/C4)*C6 Annual interest rate 7 8 9

Hope this will help, please do comment if you need any further explanation. Your feedback would be highly appreciated.