Question

I NEED ABSOLUTELY CORRECT ANSWERS FOR THESE.

Question 1 0.2 pts You receive a credit card offer with terms of 1.25% interest. When you read the fine print, however, you see that the interest is not the annual percentage rate (APR), but the amount being charged every quarter. What is the APR (also known as the nominal interest rate)? Enter your answer as the percentage rate (without the percentage sign). For example, if you calculate 12.34%, enter it as 12.34 Round your answer to two decimal places. Do not use a percentage ("%") sign. Question 2 0.3 pts Charley had a medical emergency and went to a payday loan business to get a loan of $1,033. Charley paid the loan off three months (one quarter) later with a payment of $1,442. What was the effective annual interest rate for the loan? Enter your answer as the percentage rate (without the percentage sign). For example, if you calculate 1234 (12.34%), enter it as 12.34 Round your answer to two decimal places. Do not use a percentage ("%") sign.

Answer 1

1: APR = Periodic rate * Number of periods in a year

= 1.25%*4 = 5%

Answer =5

2: Quarterly interest = 1442-1033 = 409

Quarterly rate = 409/1033 = 39.59%

Effective annual rate =(1+APR/m)^m-1

= (1+39.59%)^4-1

=279.68%

Answer = 279.68