Your credit card statement indicates the interest charged is 12% compounded monthly on the outstanding balance.

Question

Question

(a) The nominal rate (APR) is

(b) What is the effective rate of interest (APY)

calculus

Answer 1

Answer #1

(a) It is known that APR stands for annual percentage rate and is denoted by r. Here r is given to be 12%. Hence the nominal rate (APR) is,

(b) The annual percentage yield (APY) is calculated as follows:

Since APR here is 12%, one gets:

So the APY here is found to be.

Answer 2

Answer #2

(a) It is known that APR stands for annual percentage rate and is denoted by r. Here r is given to be 12%. Hence the nominal rate (APR) is,

(b) The annual percentage yield (APY) is calculated as follows:

Since APR here is 12%, one gets:

So the APY here is found to be.

Answer 3

(a) It is known that APR stands for annual percentage rate and is denoted by r. Here r is given to be 12%. Hence the nominal rate (APR) is,

Answer 4

(b) The annual percentage yield (APY) is calculated as follows:

Since APR here is 12%, one gets:

So the APY here is found to be.

Answer 5

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