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- A credit card company charges an interest rate of 1.375% per month on the unpaid balance of all accounts. The annual interest rate, they claim, is 12(1.375%) = 16.5%. What is the effective rate of interest per year being charged by the company?A credit card company charges 23.0% interest per year, compounded monthly. What effective annual interest rate does the company charge? Note: The effective annual interest rate is the return on an investment or the rate owed in interest on a loan when compounding is taken into account. O 25.71% 25.22% 25.59% O24.95% GA bank charges 1 ½% per month on the unpaid balance for purchases made with its credit card. This is equivalent to what effective annual interest rate?
- Credit card issuers must by law print the annual interest rate they charged borrowers. If the annual interest rate is stated to be 15%, with interest paid monthly, what is the actual annual cost that the bank charges its customers on the card?a bank charges one and one-half percent per month on the unpaid balance for purchases made its credit card. this is equivalent to what effective annual interest rate?A firm charges its credit customers 1.67% interest per month. What is the effective interest rate?
- a bank offered its clients a credit card which had a rate of 18.55% compounded daily. if it added 0.5% to the effective rate of interest on this card, what would be the nominal intrest rate compounded monthly?A commercial bank offers you a credit card with an annual percentage rate APR = 9%, compounding monthly. What’s the credit card’s nominal annual rate?Suppose your credit card issuer states that it charges a 17.00% nominal annual rate, but you must make monthly payments, which amounts to monthly compounding. What is the effective annual rate? a.16.08% b.16.88% c.15.27% d.17.72% e.18.39%
- A credit card quotes a rate as 21.5% compounded monthly. a) What is the effective annual interest rate? b) What would the effective annual interest rate be with daily compounding (assume the 360 day convention)?The York Company has arranged a line of credit that allows it to borrow up to $45 milion at any time. The interest rate is .621 percent per month. Additionally, the company must deposit 3 percent of the amount borrowed in a non-interest bearing account. The bank uses compound interest on its line-of-credit loans. What is the effective annual rate on this line of credit? Multiple Choices 6.40% 7.71% 7.95% 7.06% 8.83%A payday loan company charges a $25 fee for a $550 payday loan that will be repaid in 14 days using ordinary simple interest.Treating the fee as interest paid, what is the equivalent annual interest rate?
