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

What is the equivalent monthly interest rate

 Jun 14, 2017
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If 23% is compounded monthly, then the monthly rate is:

23 / 12 =1.91667%.

If 23% is the effective annual rate(or compounded annually), then the monthly rate is:

[1 + 23%]^(1/12) =1.23^(1/12) =1.0174 - 1 x 100 =1.74%

 Jun 14, 2017

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