A major credit card company has a finance charge of 1 1/2% per month on the outstanding indebtedness.

a) What is the nominal rate compounded monthly?

b) What is the effective rate?
in Word Problem Answers by

Your answer

Your name to display (optional):
Privacy: Your email address will only be used for sending these notifications.
Anti-spam verification:
To avoid this verification in future, please log in or register.

1 Answer

(a) Compounded monthly the rate per annum would be (1+0.015)12=1+0.1956, that is, 19.56% per annum.

(b) The effective monthly rate (spreading out the annual rate linearly)=1.63% per month.

by Top Rated User (1.2m points)

Related questions

1 answer
jacob has not paid his $320 credit card bill and it was sent to collections.
asked Jan 17, 2014 in Algebra 1 Answers by amanielhindi Level 1 User (380 points) | 1.9k views
0 answers
My question is about credit card debit
asked Oct 19, 2017 in Other Math Topics by Dee | 292 views
1 answer
credit card(APR)of18%.
asked Apr 30, 2014 in Other Math Topics by louvinia | 764 views
1 answer
is it credit card no or credit card mumbers.
asked Jul 3, 2013 in Word Problem Answers by anonymous | 887 views
Welcome to MathHomeworkAnswers.org, where students, teachers and math enthusiasts can ask and answer any math question. Get help and answers to any math problem including algebra, trigonometry, geometry, calculus, trigonometry, fractions, solving expression, simplifying expressions and more. Get answers to math questions. Help is always 100% free!

Most popular questions within the last 3000 days

  1. 50+50-25X0+2+2= (19)
  2. it takes 10 road workers 5 days to complete a road repair when working 2 hours a day.Working at the same pace,how many days will it take 2 people working 5 hours a day to finish it? (3)
  3. Solve 15 -1(12÷4+1)? (4)
  4. 8:4(5+2) (3)
  5. How can i represent 1/3; 3/3; 7/3; 10/3 and 15/3 on a number line? (1)

Most popular tags

87,516 questions
100,279 answers
2,420 comments
731,947 users