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Math Help - How to find APR given the weekly interest rate

  1. #1
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    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
    Last edited by dexteronline; July 9th 2012 at 06:24 AM. Reason: added missing word
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  2. #2
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    Re: 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.
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