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?
Please show how you obtained your answer.
for monthly compounding:
effective rate = (1+10% / 12)^12 - 1
for semiannual compounding:
Effective rate = (1+10% /2 )^2 -1
Best the answer..... :)
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