<span>Answer:
The credit card issuer will show APR which is 22.08% and not effective rate of interest.
This is because Effective rate, when calculated with the formula given below will come as 24.67% which is 2.59% more and hence will make customers feel that they are paying more.
r = [ { (1+ i / n) ^ (n) } - 1] * 100
Where i = APR/100
n = number of compounding periods which is 365 in this case as compounding is done daily.
[ { (1+ 0.2208 / 365) ^ (365) }- 1] * 100</span>
