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Suppose your credit card issuer states that it charges a 24.25% nominal annual rate, but you must make monthly payments, which amounts to monthly compounding.

Suppose your credit card issuer states that it charges a 24.25% nominal annual rate, but you must make monthly payments, which amounts to monthly compounding. What is the effective annual rate?

Select the correct answer.

a. 27.64%
b. 26.89%
c. 26.64%
d. 27.39%
e. 27.14%

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