A payday loan company charges a $25 fee for a $550 payday loan that will be repaid in 17 days. Treating the fee as interest paid, what is the equivalent annual interest rate? % interest Round to the nearest percent. This will be over 100% Submit Question

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Cost of Credit

The cost of credit is an extra amount that the borrower has to pay besides the loan amount. These credit charges may vary from loan to loan. The cost of credit includes interest charges, maintenance charges, and arrangement charges. Some of the costs are mandatorily collected by the lender based on the loan amount and tenure of the loan. The cost of credit is also called finance charges of the credit.