What is Annual Percentage Rate

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Reference no: EM133674269

Question

You become the owner/operator of a pawn shop. A customer submits jewelry as collateral for a loan. You value the jewelry at $500. You agree to "lend" the customer $250. The customer must repay $275 in 6 months in order to redeem the jewelry. What is the Annual Percentage Rate, or Effective Interest Rate, on the "loan".

Reference no: EM133674269

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