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8 March, 09:44

Anna pays. 85 percent interest monthly on her credit card account. when the interest rate on that debt is expressed as if it were compounded annually, the rate would be referred to as the: annual percentage rate. simplified rate. quoted rate. stated rate. effective annual rate.

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  1. 8 March, 10:10
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    The answer is the effective annual rate. It is the interest rate that is actually received or paid on a deal, credit or other financial product due to the outcome of compounding over a period of time. The effective annual interest rate is a vital idea in finance because it used to link different products to compute compounded interest contrarily. For example, if an investment pays 5% compounded monthly and another pays 5.1% compounded semi-annually, the effective annual rate can be used to choose which investment pays more over the year.
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