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19 July, 20:34

A credit card issuer offers an APR of 19.94% and compounds interest monthly. Find the effective interest rate and explain which the card issuer is mostly likely to advertise, its APR or its effective interest rate?

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  1. 20 July, 00:02
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    ((1+0.1994/12) ^12) - 1 = 21.87% effective rate

    it would advertise the APR because it is lower
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