Question

3 POILS

Kim's credit card has a 25% APR. Find the periodic interest rate from June 3
to July 2. Round your answer to two decimal places.
O
A. 2.12%
B. 2.30%
O c. 6.80%
O D. 2.05%
SUBMIT

Answer 1

2.05%

Explanation:

APEX

Answer 2

The periodic interest rate from June 3 to July 2 will be 2.08%

Explanation:

Given:

Annual percentage rate = 25%

Time period = June 3 to July 2

To Find:

Periodic interest rate =?

Solution:

The periodic interest rate r is calculated using the following formula:

`r = (1 + (i)/(m))^{(m)/(n)} - 1`

Where,

i = nominal annual rate

n = number of payments per year i.e., 12 for monthly payment, 1 for yearly payment and so on.

m = number of compounding periods per year

The period interest rate per payment is integral to the calculation of annuity instruments including loans and investments.

Now substituting the values we get

`r = (1 + (25)/(12))^{(12)/(12)} - 1`

`r = (1 + (25)/(12))^1 - 1`

`r = (1 +2.083 ) - 1`

`r = (3.083 ) - 1`

`r = 2.083 \%`