Answer:
R = 25.63%
so correct option is B. 25.63%
Step-by-step explanation:
given data
APR first 60 days = 0%
APR afterwards = 27.32% = 0.2732
to find out
effective interest rate
solution
we know equation of rate is
R = [tex](1+\frac{r}{365} )^D - 1[/tex] .......................1
here R is the apr and we know 0 for the first 60 days and 0.2319 for remaining (365 -60 ) = 305 days
so put here value we get
R = [tex](1+\frac{0}{365} )^{60} - 1[/tex] + [tex](1+\frac{0.2732}{365} )^{305} - 1[/tex]
R = 0 + [tex](1+\frac{0.2732}{365} )^{305} - 1[/tex]
R = 0.256342
effective interest rate = 25.63%
so correct option is B. 25.63%
