A large bank has increased its annual percentage rate APR on

A large bank has increased its annual percentage rate (APR) on credit cards to 31%. This move was necessary because of the \"additional risks\" faced by the bank in a weak economy. If monthly compounding is in effect, what is the effective annual interest rate being charged by the bank? The effective annual interest rate is 96 per year. (Round to two decimal places.)

Annual percentage rate (APR) = 31% or 0.31

Compounding = monthly

Calculate the effective annual interest rate -

Effective annual interest rate = [1 + (0.31/12)]¹² - 1 = [1 + 0.0258]¹² - 1 = 1.3575 - 1= 0.3575 or 35.75%

The effective annual interest rate is 35.75% per year.

$A large bank has increased its annual percentage rate (APR) on credit cards to 31%. This move was necessary because of the \$

A large bank has increased its annual percentage rate APR on

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