Ask Question
BusinessBusiness
25 February, 01:21

American Express and other credit card issuers must by law print the Annual Percentage Rate (APR) on their monthly statements. If the APR is stated to be 18.00%, with interest paid monthly, what is the card's EFF%

+3
Answers (1)
  1. 25 February, 03:37
    0
    Answer: 19.56%

    Explanation:

    Effective Rate of Return is the rate that takes into account, the compounding influence of interest rates in a given period.

    It is calculated with the formula,

    = (1 + r/n) ^ n - 1

    Where

    r = APR

    n = no of compounding periods in a year

    Interest is paid monthly so nnumber of periods will be 12.

    Therefore,

    EFF = (1 + 18%/12) ¹² - 1

    EFF = 19.56%
Know the Answer?
Not Sure About the Answer?
Find an answer to your question ✅ “American Express and other credit card issuers must by law print the Annual Percentage Rate (APR) on their monthly statements. If the APR ...” in 📘 Business if you're in doubt about the correctness of the answers or there's no answer, then try to use the smart search and find answers to the similar questions.
Search for Other Answers
You Might be Interested in
After hearing that a local tire company was looking for a new firm to handle their advertising, Kevin scheduled a sales presentation to try to persuade the company to sign on with his advertising business.
Answers (1)
To encourage borrowers to accept adjustable rate mortgages (ARMs) rather than level-payment mortgages, mortgage originators generally offer an initial short-term introductory rate that is less than the prevailing market mortgage rate.
Answers (1)
A company is in its first month of operations. On January 15, the company receives $600 from customers who will receive 10 voice lessons ($60 per lesson). As of January 31, the company has provided 8 voice lessons.
Answers (1)
Red Rock Bakery purchases land, building, and equipment for a single purchase price of $580,000. However, the estimated fair values of the land, building, and equipment are $204,000, $408,000, and $68,000, respectively, for a total estimated fair
Answers (1)
An investment with more liquidity would be ideal for someone who a. knows they will need cash in the near future. b. knows they will need cash years from now. c. wants to have a guaranteed source of income. d.
Answers (1)
New Questions in Business
Department is related to organization as employee is related to Which of the following? Perforarmance Subordinate Coworker Supervisor Team
Answers (1)
Ellie next asks you about the component located near the top of the window below the title bar. You explain that it provides easy, central access to the tasks performed while creating a document. What is the name of this component? a. status barb.
Answers (1)
Kaleb Konstruction, Inc., has the following mutually exclusive projects available. The company has historically used a three-year cutoff for projects. The required return is 10 percent.
Answers (1)
What contributions can a career management program make to an organization that is forced to downsize its operations?
Answers (1)
Every decision should be thoroughly considered using a decision-making process. True or False
Answers (1)
Home » Business » American Express and other credit card issuers must by law print the Annual Percentage Rate (APR) on their monthly statements. If the APR is stated to be 18.00%, with interest paid monthly, what is the card's EFF%
Sign Up Forgot Password?