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Your credit card company charges you 1.46 percent per month. what is the ear on your credit card?

User Johnfound
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1 Answer

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Final answer:

The Effective Annual Rate (EAR) on the credit card is approximately 19.07%.

Step-by-step explanation:

To calculate the Effective Annual Rate (EAR) on a credit card, we need to convert the monthly interest rate to an annual rate. The formula to calculate the EAR is:

EAR = (1 + Monthly interest rate)^12 - 1

Substituting the given monthly interest rate of 1.46% into the formula:

EAR = (1 + 0.0146)^12 - 1

Using a calculator, the EAR on the credit card is approximately 19.07%.

User Rehan Ch
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