Lauren and Serena each have 59-week loans. At the end of their terms, they each repay $3,800. Lauren's loan uses the simple discount model while Serena's loan uses the simple interest model. The annual simple interest rate on Serena's loan is 11.2%. What would the annual simple discount rate have to be on Lauren's loan if they borrowed the same amount of money? Round your answer to the nearest tenth of a percent.

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Cost of Credit

The cost of credit is an extra amount that the borrower has to pay besides the loan amount. These credit charges may vary from loan to loan. The cost of credit includes interest charges, maintenance charges, and arrangement charges. Some of the costs are mandatorily collected by the lender based on the loan amount and tenure of the loan. The cost of credit is also called finance charges of the credit.