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May 15th, 2020

Payday loans are very short-term loans that charge very high-interest rates. You can borrow $500 today and repay $585 in two weeks. What is the compounded annual rate implied by this 17 percent rate charged for only two weeks? (Hint: Compound the 2-week return 26 times for the annual return.) (Do not round intermediate calculations and round your final answer to 2 decimal places.)

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