A credit card bill shows a balance due of $980 with a monthly interest rate of 1.91%. What is the APR?
A) 18.36%
B) 19.99%
C) 22.92%
D) 25.49%

Question

Quizplus · Accepted Answer

To find the APR (Annual Percentage Rate), we need to use the formula:
APR = (1 + Monthly interest rate)^12 - 1

In this case, the monthly interest rate is 1.91%, which we can express as a decimal by dividing by 100: 0.0191.

Plugging this into the formula, we get:
APR = (1 + 0.0191)^12 - 1
APR = 0.2409 or 24.09%

Therefore, the closest option to the correct APR is C) 22.92%.

A Credit Card Bill Shows a Balance Due of $980