Problem 6.77 – APR and EAR for Different Loan Structures at a Check-Cashing Store
Fundamentals of Corporate Finance
Ross, Westerfield, and Jordan
13th Edition
Examine a check-cashing store that makes personal loans with various interest structures. The store offers one-week loans at an interest rate per week, one-week loans at a discount interest rate per week, and one-month add-on interest loans at a discount interest rate per week with weekly installments. Calculate the APR and EAR for each of these loan structures. Find the APR and EAR of the loan.