Question

A credit card issuer charges an apr of 10.82%, and its billing cycle is 30 days long. what is its periodic interest rate? show your work.

Answer 1

the answer is --- 0.89 APEX

Answer 2

Periodic Interest rate = 0.8893151 % ≈ 0.89%

Explanation:

Given that a credit card issuer charges an apr of 10.82%, and its billing cycle is 30 days long.

It means APR = 10.82%, Daily interest rate = 10.82%/365 = 10.82/36500 = 0.000296438

Billing cycle = 30 days.

Periodic Interest rate = Daily interest rate x Billing cycle.

Periodic Interest rate = 0.000296438 x 30

Periodic Interest rate = 0.008893151

Periodic Interest rate = 0.8893151 % ≈ 0.89%