APR Finance question *Show work*

Business & Finance
Tutor: None Selected Time limit: 1 Day

If I have 2 credit cards with an APR of 10%. Card number 1 charges 0.8333% compounded monthly. Card number 2 charges 5% compounded semiannually (twice a year). Given theses APR's, what's the effective annual rates charged by these 2 credit cards?  

Apr 2nd, 2015

effective annual rate
Monthly compounding 10.471%
semiannual 10.250%

Apr 2nd, 2015

Please show how you obtained your answer.

Apr 2nd, 2015

for monthly compounding:

effective rate = (1+10% / 12)^12 - 1

for semiannual compounding:

Effective rate = (1+10% /2 )^2 -1


Best the answer..... :)

Apr 2nd, 2015

Studypool's Notebank makes it easy to buy and sell old notes, study guides, reviews, etc.
Click to visit
The Notebank
...
Apr 2nd, 2015
...
Apr 2nd, 2015
Feb 20th, 2017
check_circle
Mark as Final Answer
check_circle
Unmark as Final Answer
check_circle
Final Answer

Secure Information

Content will be erased after question is completed.

check_circle
Final Answer