As a College Student, You Probably Receive Many Credit Card

question 76

Multiple Choice

As a college student, you probably receive many credit card offers in the mail. Consider these two offers. The first card charges a 17 percent APR. An examination of the footnotes reveals that this card compounds daily (365 day year) . The second credit card charges 18 percent APR and compounds semiannually. What is the effective annual rate of the cheaper card?

• A) 18.00 percent
• B) 17.00 percent
• C) 18.81 percent
• D) 18.53 percent

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