If you took out a payday loan, you could expect to pay an annual interest rate of ( LO8) a) less than 5 percent b) between 5 and 10 percent c) between 10 and 30 percent d) between 30 and 100 percent e) over 100 percent

Payday loans are small, short-term, unsecured loans that borrowers agree to repay on their next payday. These loans are designed to cover unexpected expenses and are usually repaid within two to four weeks. Because they are short-term loans, the interest rates on payday loans are generally much higher than those of other types of loans.

Now that we know the typical interest rates of other types of loans are lower than those of payday loans, we can compare the given options: a) less than 5%: This interest rate is typically associated with well-qualified borrowers who take out long-term loans, which are not payday loans. b) between 5 and 10%: This interest rate is often found on personal loans and credit cards. It is higher than the rates on long-term loans, but it may still be too low for a payday loan. c) between 10 and 30%: This range may include average interest rates for credit cards and some personal loans. Although this range is relatively high, it is generally not high enough for payday loans. d) between 30 and 100%: Getting closer to payday loan interest rates, this range seems much more likely. However, let's examine option e) to make sure. e) over 100%: This range might seem extreme, but payday loans are notorious for their very high interest rates, which can even exceed annual percentage rates (APR) of 100%.

Based on the comparisons made in Step 2, we can eliminate options a) to c) as they are too low for payday loan interest rates. Since payday loans are known to have incredibly high interest rates that often exceed 100% APR, the correct answer is: e) over 100 percent.