A company offers pay day loans, the percentage of interest charged on

any answer suggestions?

I may be a poor judge but this doesn’t seem to be a well written question. First of all, it is not clear if the 20 or 40% is per year or per month or per period.

Second, we know there are 24 payments but we do not know if they are monthly or weekly or annual.

A more realistic scenario would be was interest charged per year or per month which then compounds.

In this case, trying the assumption that the interest is for the duration of the loan, in that case, you have three contributing amounts to the loan:

A. 500 with no interest = 500
B. 1500 with 20% interest = 1800
C. 500 with 40% interest = 700

Total: £3000
Payment = 3000/24 = 125

PS. However, this does not make a lot of sense in reality because if you borrow for a month or if you borrow for 10 years, your interest rate cannot be the same and has to change depending on the duration of the loan, not the size…

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