> payday loans that lend for 30% APR (Apple Store takes 30%)
You have to flip the percentage. The fraction of money that goes to the intended destination after a 30% tax is 70%. The fraction of money that goes to the intended destination with a one year 100% APR loan is 50%.
Though there's no reason to assume a year in particular. If you take a six month loan at 100% APR, you have to pay back 141%. Paying back 141% is equivalent to a 29% tax. And if the best comparison is "six months of compounding payday loans" that's even worse than the initial comment suggested.
I think that we should either refer people to serious treatments of bond pricing or say nothing on the matter: it’s very easy to confuse everyone with “sort of” explanations of important math.
You have to flip the percentage. The fraction of money that goes to the intended destination after a 30% tax is 70%. The fraction of money that goes to the intended destination with a one year 100% APR loan is 50%.
Though there's no reason to assume a year in particular. If you take a six month loan at 100% APR, you have to pay back 141%. Paying back 141% is equivalent to a 29% tax. And if the best comparison is "six months of compounding payday loans" that's even worse than the initial comment suggested.