Madeline’s credit card had an APR of 18.96% All last year, and interest was compounded periodically throughout the year. which of these statements accurately describes the effective interest rate of Madeline’s credit card last ?

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dfbustos dfbustos · Answer 1 · 2020-01-08T10:46:08+01:00

Answer:

A. It was less than 18.96% whether interest was compounded daily or monthly.

For this case we need to find the interest compuned dauly and monthly

[tex]i_{daily}= \frac{18.96}{365}=0.0519\%[/tex]

[tex]i_{monthly}= \frac{18.96}{12}=1.58 \%[/tex]

So then that's the best option since both values are less than 18.96%

Step-by-step explanation:

A. It was less than 18.96% whether interest was compounded daily or monthly.

For this case we need to find the interest compuned dauly and monthly

[tex]i_{daily}= \frac{18.96}{365}=0.0519\%[/tex]

[tex]i_{monthly}= \frac{18.96}{12}=1.58 \%[/tex]

So then that's the best option since both values are less than 18.96%

B. It was greater than 18.96% whether interest was compounded daily or monthly.

False as we can see for option A the interest rates for the compounded time monthly and daily are less than 18.96%.

C. It was greater than 18.96% if interest was compounded daily but not if interest was compounded monthly.

False for both we have values lower than 18.96%.

D. It was less than 18.96% if interest was compounded daily but not if interest was compounded monthly.

False for both we have values lower than 18.96%.

baireshilda baireshilda · Answer 2 · 2020-06-18T19:10:16+02:00

Answer:

it was greater than 18.96% whether interest was compounded daily or monthly.

Step-by-step explanation:

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