A credit card had a APR of 33.01% all of last year and compounded interest daily. what was the credit cards effective interest rate last year?

Question

asked Sep 14, 2020 212k views

2 Answers

Rob Tillie · Answer 1 · 2020-09-20T23:40:56+0000

Answer:

Effective annual rate = (1 + r / m )^m - 1

r = Annual nominal rate of interest

m = Number of compounding periods in a year

Effective annual rate =(1 + 33.01% / 365 )^365 - 1 = 39.09%

Explanation: