A Credit Card Account That Charges Interest at the Rate

question 110

Multiple Choice

A credit card account that charges interest at the rate of 1.25 percent per month would have an annually compounded rate of _______ and an APR of _______.

• A)16.08 percent; 15.00 percent
• B)14.55 percent; 16.08 percent
• C)12.68 percent; 15.00 percent
• D)15.00 percent; 14.55 percent Annually compounded rate = (1.0125)¹²-1 = 16.08%

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Definitions:

Statute of Frauds

A legal principle requiring certain contracts, such as those for the sale of land, to be in writing to be enforceable.

Verbal Contract

A legal agreement made through spoken words instead of written documentation, though harder to prove.

Indefinite Period

A time span without a specified end date, characterized by an absence of defined duration.

Part Performance

A doctrine that permits the courts to enforce an unwritten contract concerning land where certain conditions have been met.