THanks Ricky Ripov\'s Pawn Shop charges an interest rate of 13.75 percent per mo

Question

THanks

Ricky Ripov's Pawn Shop charges an interest rate of 13.75 percent per month on loans to its customers. Like all lenders, Ricky must report an APR to consumers. What rate should the shop report? (Round your answer as directed, but do not use rounded numbers in intermediate calculations. Enter your answer as a percent rounded to decimal places (e.g., 32.16). What is the effective annual rate? (Round your answer as directed, but do not use rounded numbers in intermediate calculations. Enter your answer as a percent rounded to 2 decimal places (e.g., 32.16).)

Explanation / Answer

Annual Percentage Rate =13.75*12 = 165%

Since the rate of interest in not compounding, effective annual rate will also remain the same.

Effective Annual Rate = 165%

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