Expert Card has an APR of 16.2% compounded monthly. Passport has a daily periodic interest rate of 0.0398%. Explore has a monthly periodic interest rate of 1.35%. Which card has the higher APR?

Question

tkhunny · Answer

First, 3 items?  "Highest" is more appropriate than "higher".
Second, You didn't waste any time on Expert, did you?  The APR is given in teh problem statement.
Third, Who cares about APR?  It is the annual yield that can be compared directly.  Without compounding considerations, APR should not be compared directly.

Expert: $\left(1 + \dfrac{0.162}{12}\right)^{12} - 1$

Passport: $(1 + 0.000398)^{365} - 1$

Explore: $(1 + 0.0135)^{12} - 1$

Now THOSE you can compare.