Question

A credit card advertises an annual interest rate of 23%.

Answer 1

Given:

A credit card advertises an annual interest rate of 23%.

To find:

The equivalent monthly interest rate.

Solution:

We know that,

1 year = 12 months

It is given that, the credit card advertises an annual interest rate of 23%. So, the equivalent monthly interest rate is:

$\dfrac{23\%}{12}=1\dfrac{11}{12}\%$

$\dfrac{23\%}{12}\approx 1.9167\%$

Therefore, the equivalent monthly interest rate is $1\dfrac{11}{12}\%$ and the approximate equivalent monthly interest rate is 1.9167%.