You are paying an effective annual rate of 14.80 percent on your credit card. Th

Question

You are paying an effective annual rate of 14.80 percent on your credit card. The interest is compounded monthly. What is the annual percentage rate on your account?
-12.28 percent -16.52 percent -13.88 percent -14.80 percent -13.06 percent You are paying an effective annual rate of 14.80 percent on your credit card. The interest is compounded monthly. What is the annual percentage rate on your account?
-12.28 percent -16.52 percent -13.88 percent -14.80 percent -13.06 percent
-12.28 percent -16.52 percent -13.88 percent -14.80 percent -13.06 percent

Explanation / Answer

effective annual rate = (1+APR/n)^n -1

=>

14.80% = (1+APR/12)^12 -1

=>

APR = 13.88%

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