Question
You have a $1,000 balance on your credit card today. You don't plan on using your credit card to buy anything else. You wish to
You have a $1,000 balance on your credit card today. You don't plan on using your credit card to buy anything else. You wish to make equal payments starting one month from today to pay off your bill. You've done the calculations and found that if you make a $36 payment per month, your card will be fully paid off 3 years from today. Your credit card company charges you an ANNUAL interest rate that is compounded monthly.
1.) What is the ANNUAL RATE OF INTEREST that they charge?
2.) What is the EFFECTIVE ANNUAL RATE OF INTEREST that they charge?
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Focus On Personal Finance
Authors: Jack R. Kapoor, Les R. Dlabay Professor, Robert J. Hughes, Melissa Hart
5th Edition
0077861744, 978-0077861742
