I have not posted the past few days due to attending an educational conference and I was busy from quite early to quite late. As I sit in the airport, waiting my flight to Alaska, I checked out today’s issue of USA Today and discovered something that I didn’t know about.
Most of the time when we discuss interest rates, we use current market rates and we apply them to standard situations. I appears that interest rates can be much higher under certain circumstances, especially for those short term loans.
Apparently, there are several companies who loan money to desperate people but they end up charging anywhere from 200 to 500 percent. Yes, I know rates are not supposed to be that high but companies have discovered if they can associate themselves with native tribes, they can charge more interest because they are no subject to certain rules.
These tribes are not involved with the actual loans but they provide the protection via their immunity from governmental interference. The whole point though is that many people fall prey to these companies. So it might pay to have students create spread sheets to calculate the total amount of interest using current rates, rates charged by these companies and other short term paycheck loan businesses to see how these differences in rates effect the total amount spent.
My plane is getting ready to load so I am off. I will be back to normal tomorrow. Have a great day. Let me know what you think.
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