Friendly's Quick Loans offers you 'two for four or I knock on your door.' This means you get £2 today and repay £4 when you get your wages in one week (or else). Requirement 1:
What's the effective annual return Friendly’s earns on this lending business?
Requirement 2:
If you were brave enough to ask, what quoted rate would Friendly’s say you were paying?

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Secured loans are protected by collateral security. examples: title loans where the borrower uses the car title as collateral security interest rates are lower and repayments are longer therefore risk is low as a collateral security is given as guarantee to the bank in case of failure to pay the loanunsecured loans are not protected by collateral security but it is given on the creditworthiness of the borrower, trusting that she/he will pay on time. examples; payday loans is a short term loan where the borrower lends money from the bank and pays is back when the borrower receives his/her wages.interest rates are high and repayments are shorter. but the risk is high as no collateral security is given as a guarantee to the bank for payment of the loan