Jordan K. answered • 10/06/15

Tutor

4.9
(79)
Nationally Certified Math Teacher (grades 6 through 12)

Hi Harjit,

We can calculate the annual interest rate by multiplying the given interest rate by the appropriate number of periods per year in each case:

Annual Interest Rate (R) at 2%/month:

**R**= (0.02/month)(12 months / year) =

**24%**

Annual Interest Rate (R) at 2%/week:

**R**= (0.02/week)(52 weeks / year) =

**104%**

We can see that the monthly rate yields an annual rate of 24%, which is well within the legal maximum of 60%. The same weekly rate yields an annual rate of 104%, which far exceeds that legal maximum.

Thanks for submitting this problem and glad to help.

God bless, Jordan.