After Reading the Fine Print in Your Credit Card Agreement

question 23

Essay

After reading the fine print in your credit card agreement, you find that the "low" interest rate is actually an 18 percent APR, or 1.5 percent per month.Now, to make you feel even worse, calculate the effective annual interest rate.

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Definitions:

Stock Outstanding

The aggregate amount of a corporation's stock currently possessed by all its shareholders, encompassing blocks of shares owned by institutional investors and shares that are subject to restrictions.

Shares Issued

The total number of shares that a corporation has legally distributed to shareholders, which may include shares held by the public as well as restricted shares owned by the company's insiders.

Red Herring

A preliminary prospectus filed by a company with the Securities and Exchange Commission (SEC), usually in connection with the company's initial public offering.

Potential Investors

Individuals or institutions with an interest or capacity to allocate capital into businesses, projects, or securities, expecting future financial returns.