Gretchen just got a new credit card that offers an introductory APR of 4.8% for the first 4 months and a standard APR of 15.6% t

Question

2 years ago

4

Gretchen just got a new credit card that offers an introductory APR of 4.8% for the first 4 months and a standard APR of 15.6% t

hereafter. If interest is compounded monthly, what is the periodic interest rate during the first 4 months?
A. 0.4%
B. 0.3%
C. 1.2%
D. 1.6%

Mathematics

2 answers:

lozanna [386] · Answer 1 · 2023-12-21T12:24:15+03:00

lozanna [386]2 years ago

7 0

Answer:

A is correct here

Step-by-step explanation:

fgiga [73] · Answer 2 · 2023-12-21T11:10:49+03:00

We have this formula APR = (Periodic Rate) ×<span> (Number of Periods) to get the APR and since it's annual, the number of periods is 12. The question asked about the periodic rate for the first 4 months so relatively, 15.6 is not included in our solution.
</span>
We then substitute the known values to the equation to get

4.8 = (Periodic Rate) × (12)
Periodic Rate then is 0.4 which the answer is letter A: 0.4%.