Respuesta :
You pay 1.5 percent interest on your credit card each month. This indicates that the actual interest rate you pay is 19.56 percent annually.
Nowadays, the majority of credit cards have variable interest rates based on an interest rate index. Normally, this interest is compounded daily. The minimum payment is due once a month, nevertheless.
Once a month, interest is calculated. The calculated interest is added to the account balance each month at a rate of r = 1.5 percent. This suggests that the balance will grow faster than 19.56% every year. You may calculate the effective annual rate (EAR) for this card by following the formula:
EAR = [tex](1 + r)^{Month}-1[/tex]
EAR = [tex](1+0.015)^{12} -1[/tex]
EAR = 19.56%
The effective interest paid is 19.56% per year.
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