Question

Your credit card charges you.85 percent interest per month. This rate when multiplied by 12 is called the rate ___________.

a) effective annual
b) annual percentage
c) periodic interest
d) compound Interest
e) periodic interest

Answer 1

The rate when multiplied by 12 is called the effective annual rate.

Step-by-step explanation:

The rate when multiplied by 12 is called the effective annual rate.

1. Effective annual rate
2. Annual percentage rate
3. Periodic interest rate
4. Compound interest rate
5. Periodic interest rate

The effective annual rate is used to calculate the total interest paid on a loan or investment over one year. It takes into account the compounding of interest throughout the year and provides a more accurate measure of the true cost or return.