Harjit H.

asked • 10/05/15

Calculate the annualized interest rate these companies are charging if the penalty is two percent a month. What if the penalty was two percent a week?

According to an article in the Maclean’s magazine, “Cable, satellite and wireless companies may be
charging illegal late fees. Companies may calculate a compounded late-fee rate of two percent a month.
However, because they charge even if a customer is late by one week, that can mean an effective
annualized interest rate above the maximum allowed by the Criminal Code: 60 percent.” (Maclean’s
November 28, 2005, p.16.)
 
Calculate the annualized interest rate these companies are charging if the
penalty is two percent a month. What if the penalty was two percent a week?

1 Expert Answer

By:

Jordan K. answered • 10/06/15

Tutor
4.9 (79)

Nationally Certified Math Teacher (grades 6 through 12)

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