The Question had to do with finding interest rate for a loan in amount of $40 that was to be paid back in a week's time with $50

Here is what I think the Annual Effective Rate is for a weekly interest rate of 25%

Is it correct?

Thanks in Advance

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- July 9th 2012, 03:28 AMdexteronlineHow to find APR given the weekly interest rate
The Question had to do with finding interest rate for a loan in amount of $40 that was to be paid back in a week's time with $50

Here is what I think the Annual Effective Rate is for a weekly interest rate of 25%

Is it correct?

Thanks in Advance - July 14th 2012, 01:55 AMWilmerRe: How to find APR given the weekly interest rate
$10 is interest for 1 week: so for a year, interest would be 52 * 10 = $520

40(1 + i)^1 = 560

1 + i = 560/40 = 14

i = 14 - 1 = 13

So annual interest rate = 1300% !!

And that's keeping it simple: no compounding.