QuestionAugust 9, 2025

How many borrowers on average default on a payday loan? Borrowers default on one in twenty payday loans. Borrowers default on one in five payday loans. Borrowers default on one in six payday loans.

How many borrowers on average default on a payday loan? Borrowers default on one in twenty payday loans. Borrowers default on one in five payday loans. Borrowers default on one in six payday loans.
How many borrowers on average default on a payday loan?
Borrowers default on one in twenty payday loans.
Borrowers default on one in five payday loans.
Borrowers default on one in six payday loans.

Solution
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Answer

Approximately 0.1389 or 13.89% of borrowers on average default on a payday loan. Explanation 1. Calculate the average default rate Convert each statement into a fraction representing the default rate. - One in twenty: \frac{1}{20} = 0.05 - One in five: \frac{1}{5} = 0.2 - One in six: \frac{1}{6} \approx 0.1667 2. Calculate the average of these rates Add the fractions and divide by the number of statements. Average default rate = \frac{0.05 + 0.2 + 0.1667}{3} \approx 0.1389

Explanation

1. Calculate the average default rate<br /> Convert each statement into a fraction representing the default rate. <br />- One in twenty: $\frac{1}{20} = 0.05$<br />- One in five: $\frac{1}{5} = 0.2$<br />- One in six: $\frac{1}{6} \approx 0.1667$<br /><br />2. Calculate the average of these rates<br /> Add the fractions and divide by the number of statements.<br />Average default rate = $\frac{0.05 + 0.2 + 0.1667}{3} \approx 0.1389$
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