Master Card 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 24.25%,with interest paid monthly,what is the card's EFF%?

Question

Quizplus · Accepted Answer

The formula to convert APR to EFF% with interest paid monthly is:
EFF% = (1 + APR/12)^12 - 1
Plugging in the values, we get:
EFF% = (1 + 24.25%/12)^12 - 1
EFF% = 27.14%
Therefore, the answer is A) 27.14%.

Master Card and Other Credit Card Issuers Must by Law