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Posted on Sep 06, 2024

Suppose your credit card issuer states that it charges a 20.75% nominal annual rate, but you must make monthly payments, which amounts to monthly compounding.

Suppose your credit card issuer states that it charges a 20.75% 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. 23.84%

b. 21.84%

c. 22.84%

d. 23.34%

e. 22.34%

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