Payday Loan Cost Comparison

A consumer is comparing two short-term loan options. Option A is a $375 loan for a two-week period with a $50 finance charge. Option B is a $400 loan for a three-week period with an $80 finance charge. Assuming a 52-week year, which of the following statements accurately compares the Annual Percentage Rate (APR) of the two options?

A consumer is comparing two short-term loan options. The first is a $375 loan for a two-week period with a $50 finance charge. The second is a $400 loan for a three-week period with an $80 finance charge. Based on this information, the loan with the higher dollar finance charge ($80) also has the higher Annual Percentage Rate (APR).

Calculating Payday Loan APR

A consumer is comparing two short-term loans. Loan A is for $375 for a two-week period with a $50 finance charge. Loan B is for $400 for a three-week period with an $80 finance charge. Match each financial metric with its correct calculated value or conclusion, assuming a 52-week year.

Payday Loan Recommendation and Justification

A consumer wants to determine which of two short-term loans is more expensive in terms of its annualized interest rate. The first loan is for $375 for a two-week period with a $50 finance charge. The second is for $400 for a three-week period with an $80 finance charge. Arrange the following steps in the correct logical order to perform this comparison, assuming a 52-week year.

A consumer is comparing two short-term loans. The first is a $375 loan for a two-week period with a $50 finance charge. The second is a $400 loan for a three-week period with an $80 finance charge. When calculating the Annual Percentage Rate (APR) for both loans (assuming a 52-week year), the APR for the second loan is ____ percentage points higher than the APR for the first loan. (Enter a numerical value rounded to one decimal place).

Critique of a Loan Comparison

Evaluating a Peer's Financial Advice