@amonaroll32

A credit card issuer charges an APR of 13.99%, and its billing cycle is 30 days long. What is its periodic interest rate?

A. 14.37%
B. 1.15%
C. 0.97%
D. 11.43%

Question

@amonaroll32 

A credit card issuer charges an APR of 13.99%, and its billing cycle is 30 days long. What is its periodic interest rate?

 		A.	14.37%
 		B.	1.15%
 		C.	0.97%
 		D.	11.43%

anonymous · Answer

i think there  is a formula i need to use but i dont know it

anonymous · Answer

Sorry, I'm not sure what this one would be. It'd be nice if you could stop mentioning my name though <.<

tkhunny · Answer

Well, A and D are just silly.

Can you hazard a guess at which of the remaining two might be a better choice?  Keep in mind that 13.99 > 12.

anonymous · Answer

b

tkhunny · Answer

Let's see...

$1.1399^{30/360} = 1.01097 \implies 1.097$%
$1.1399^{30/365} = 1.01082 \implies 1.082$%

It's not real clear exactly how it is being calculated, but I would have to take a shot at B.

tkhunny · Answer

Just for the record:

$1.1399^{n/365} = 1.0115 \implies n = 31.8736$
$1.1399^{n/360} = 1.0115 \implies n = 31.4370$

So, I'm still not clear on exactly how ti was calculated.  Those are pretty weird numbers of days.