<P> A 2012 Pew Charitable Trusts study found that the average borrower took out eight loans of $375 each and paid interest of $520 across the loans . </P> <P> The equation for the annual cost of a loan in percent is: </P> <P> ((Loan cost / Loan amount) / Days borrowed) ∗ 365 days (\ displaystyle (((\ text (Loan cost)) / (\ text (Loan amount))) / (\ text (Days borrowed))) * 365 (\ text (days))) </P> <P> The payday loan industry takes advantage of the fact that most borrowers do not know how to calculate their loan's APR and do not realize that they are being changed rates up to 390% interest annually . Critics of payday lending cite the possibility that transactions with in the payday market may reflect a market failure that is due to asymmetric information or the borrowers' cognitive biases or limitations . </P>

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