Question

Ethan opened a credit card at a department store with an APR of 18.24% compounded quarterly. What is the APY on this credit card?

Answer 1

\[APY=(1+(APR/4))^{4}-1\]\[APY=(1+(.1824/4))^{4}-1\]\[APY= (1+.0456)^{4}-1\]\[APY=(1.1953)^{4}-1\]\[APY = 1.1953-1\]\[APY=.1953\]

So the APY = 19.53%