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23 May, 03:14

Suppose you have a credit card with an 18.99% APR compounding monthly. What is your effective interest rate?

18.99%

20.73%

22.04%

25%

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Answers (1)
  1. 23 May, 03:37
    0
    Monthly rate = 18.99%

    Effective Annual Rate = (1 + (.1899/12)) ^12

    Effective Annual Rate = 1.2073321404

    Effective Annual Rate = 20.73321404%
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