Thread: How 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

$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.