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A credit card company advertises an APR of 14.7%, compounded daily. What is the effective interest rate? Round your answer to two decimal places. ​
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A credit card company advertises an APR of 14.7%, compounded daily. What

is the effective interest rate? Round your answer to two decimal places. ​

User Rakyesh Kadadas
by
4.5k points

1 Answer

7 votes

Answer:

16%

Step-by-step explanation:

Effective interest rate = (1 + i/m)^m - 1

= (1 + 0.147/365)^365 - 1

= 0.1583

= 0.16 = 16%

User Ricardo Gasca
by
5.3k points
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