Problema Solution
You need $400 badly, and decide to write a check at a check cashing place to get that money. Assuming you much write the check for $500 to get the $400 in cash, and the check will be cashed in 2 weeks, what simple interest rate did you just pay? Assume 52 weeks in a year for this problem
Answer provided by our tutors
A = P(1 + r*t)
A = $500
P = $400
t = 2/52 = 1/26 years
r = ? simple interest rate
r = (A/P - 1)/t
r = (500/400 - 1)/(1/26)
r = 6.5 or 650%