In this lesson you will learn what a payday loan is and the high cost involved in using such a loan. You will calculate the annual percentage rate (APR) on a loan and see why comparing loans using APR is more informative than simply comparing by interest rates.
When you have finished this lesson you should be able to:
- Define loan, payday loan, interest rate and annual percentage rate.
- Calculate an annual percentage rate.
- Explain key facts regarding payday loans.