Answered

Engage with knowledgeable experts and get accurate answers on IDNLearn.com. Our experts are ready to provide prompt and detailed answers to any questions you may have.

If a store credit account charges 1.5% interest each
month, what is the APR?

Sagot :

Logo88idn
the APR is the annual percentage rate
therefore the APR is 1.5x12=18%
AL2006idn
If the monthly interest is 1.5%, then the APR is

100 [ (1.015)¹² - 1 ] = 19.56 %

You might think that it would be (12 x 1.5) = 18% , but it's not.

The interest is compounded.  That means interest is added this month,
and then it becomes part of the amount on which interest is charged
next month.

So you're charged interest on interest, and it adds up.
Thank you for joining our conversation. Don't hesitate to return anytime to find answers to your questions. Let's continue sharing knowledge and experiences! Accurate answers are just a click away at IDNLearn.com. Thanks for stopping by, and come back for more reliable solutions.