Now-cash charged him 50 to advance his tax refund so he


Tom would have received his tax refund of $1,000 in full exactly 9 days after he filed his return. Because he was desperate for cash, he instead turned to Now-Cash to get his refund immediately. Now-Cash charged him $50 to advance his tax refund. So, he received $950 immediately and signed an agreement to have his tax refund deposited into the Now-Cash's bank account. Assuming a 360-day year, what is the effective annual rate of interest that he was charged for the tax-refund advance?

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Finance Basics: Now-cash charged him 50 to advance his tax refund so he
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