A typical two-week payday loan charges a fee of $15 for every $100 borrowed over the two week period. What is the APR equivalent for a loan like this?

To calculate the Annual Percentage Rate (APR) for this payday loan, we can follow these steps:

### Step 1: Understand the loan terms
- The payday loan charges a **fee of $15** for every **$100 borrowed** over **2 weeks**.
- This means that for a two-week loan, the borrower pays $15 for every $100, which is equivalent to a 15% interest rate over 2 weeks.

### Step 2: Convert to an annual rate
To convert this two-week interest rate into an APR, we need to scale the 15% over the whole year. There are **52 weeks** in a year, so a two-week period would occur **26 times** in a year.

- The interest rate for 2 weeks is 15%.
- Over a full year, this interest rate would be multiplied by 26:

\[
APR = 15\% \times 26 = 390\%
\]

### Conclusion:
The APR equivalent for this payday loan is **390%**.

Would you like more details on how APR is calculated or any related questions? Here are a few you might find interesting:

1. How does compounding affect the APR of a loan?
2. What is the difference between APR and APY in loans?
3. How do payday loans compare to traditional loans in terms of interest rates?
4. What are some common alternatives to payday loans?
5. How can borrowers avoid the debt cycle associated with high-interest loans?

**Tip**: Always check the APR before taking a loan, as fees may seem small, but they accumulate significantly over time when converted to an annual rate!

Discover how to calculate the Annual Percentage Rate (APR) for a payday loan that charges $15 per $100 borrowed over a two-week period. This step-by-step guide explains percentage calculations, interest rates, and the formula used to convert a short-term loan into an APR equivalent. Suitable for students in Grades 10-12 and beyond.

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