Question

This credit account carries a temporary low introductory rate (teaser rate) of_________%. This teaser APR applies to purchases made within the first________months that the account is open. After this introductory period, the APR for purchases reverts to a higher variable APR. This regular APR for purchases is calculated by__________% to the U.S. prime rate (assumed to be 4% in the disclosure). Therefore, if the U.S. prime rate remains at 4%, then the regular APR for purchases is______%

Answer 1

Introductory rate is 1.99%

After first 6 months.

APR for purchase is 8.99%

Regular APR for purchases is 12.99%

Step-by-step explanation:

This is required by law in U.S. for the credit card rates. The APR introductory rate for the purchases is 1.99%. This rate is then adjusted with the U.S. prime rate and it becomes 8.99% after first 6 months. The rate is then adjusted with the further 4% U.S. prime rate. The regular APR for the purchases is 12.99%.