You Have Been Offered a Credit Card with an Interest

question 55

Multiple Choice

You have been offered a credit card with an interest rate of 1.5% per month. This is equivalent to and effective annual rate (EAR) of

• A) 12.17%.
• B) 18.00%.
• C) 24.00%.
• D) 19.56%.

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Definitions:

Profit-Maximizing

The process or strategy of adjusting production and sale practices to achieve the highest possible profit.

Total Revenue

The total income received from the sale of goods or services before any expenses are subtracted.

Nondiscriminating Monopolist

A monopolist that charges all consumers the same price for its product or service, as opposed to charging different prices based on consumer attributes or willingness to pay.

Profit-Maximizing

is the process of determining the best output and pricing levels to achieve the highest profit.