Find the best answers to your questions at Westonci.ca, where experts and enthusiasts provide accurate, reliable information. Join our Q&A platform and connect with professionals ready to provide precise answers to your questions in various areas. Discover in-depth answers to your questions from a wide network of professionals on our user-friendly Q&A platform.

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


Sagot :

logo88
the APR is the annual percentage rate
therefore the APR is 1.5x12=18%
AL2006
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.