Question

A credit card advertises an annual interest rate of 23% what is the equivalent monthly interest rate?

Answer 1

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➷ Simply divide this value by the number of months:

23/12 = 1.916

The equivalent monthly interest rate is 1.916%

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Answer 2

The equivalent monthly interest rate would be 1.92% (approx)

Explanation:

Given,

The annual interest rate = 23 %,

Since, 1 year = 12 month,

Thus, the monthly interest rate =
`\frac{\text{Annual interest rate}}{12}`

`=(23)/(12)`

`=1.9166667\%`

`=1.92\%`

Hence, the equivalent monthly interest rate would be 1.92% (approx)