. Your friend has a credit card with an APR of 49.9%. What would his finance charge be on a $500 balance for just 1 month? (round to the hundredths place)

Question

. Your friend has a credit card with an APR of 49.9%. What would his finance charge be on a $500 balance for just 1 month? (round to the hundredths place)

Answer 1

APR stands for the annual percentage rate on a loan which is the interest rate on a one year loan. To calculate the monthly rate r, we know that:

r¹² = 49.9

Therefore r = 49^1/12 = 1.385