Question

(Cash Versus Financing LC)

A primary credit card holder has a current APR of 16.75%. What is the monthly periodic interest rate, rounded to the nearest hundredth of a percent?

0.01%
1.40%
13.96%
16.75%

Answer 1

To find the monthly periodic interest rate, we divide the annual percentage rate (APR) by 12.

16.75% / 12 = 1.3958%

Rounded to the nearest hundredth of a percent, the monthly periodic interest rate is 1.40%.

Therefore, the correct answer is: 1.40%