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:
[tex]\dfrac{23\%}{12}=1\dfrac{11}{12}\%[/tex]
[tex]\dfrac{23\%}{12}\approx 1.9167\%[/tex]
Therefore, the equivalent monthly interest rate is [tex]1\dfrac{11}{12}\%[/tex] and the approximate equivalent monthly interest rate is 1.9167%.
