What is effective cost of loan

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A pay-day loan is a short-term loan provided to people who make a promise to repay the debt when they receive their next paycheck, Suppose some unexpected bills leave you short of cash and you will not receive another paycheck until next month, A local establishment offers a pay-day loan where you can borrow the 8350 you need to cover expenses, The stated annual interest rate is 12% and the amount borrowed, plus interest, is due in one month, The loan also requires that you pay a $30 fee at the time at which you receive the funds, If you repay the debt as promised, what is effective cost of this loan?

Reference no: EM133062526

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