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A payday loan company charges 8.25% interest for a 2 week period. What is the Annual...

A payday loan company charges 8.25% interest for a 2 week period. What is the Annual Interest rate?
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Answer #1
2 week Interest(r) = 8.25%
Total Number of weeks in a year = 52
Assuming that the interest rate is compounded every 2 weeks
Annual Interest rate = ((1+r)^(52/2)-1)
Annual Interest rate = ((1+0.0825)^(52/2)-)
Annual Interest rate = 685.46%
Assuming that the interest rate is not compounded every 2 weeks and compounded annually
Annual Interest rate = (r)*(52/2)
Annual Interest rate = (0.0825)*(52/2)
Annual Interest rate = 214.5%
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