Problembig doms pawn shop charges an interest rate of 278, Ask an Expert

Accounting

Problem:

Big Dom's Pawn Shop charges an interest rate of 27.8 percent per month on loans to its customers. Like all lenders, Big Dom must report an APR to consumers.

Required:

Question 1: What rate should the shop report?

Question 2: What is the effective annual rate?

Note: Provide support for rationale.

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Accounting Basics, Accounting

Category:- Accounting Basics
Reference No.:- M91171637

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