Caleb has an offer from a credit card issuer for 0% apr for the first 30 days and 17.68% apr afterwards, compounded daily. what effective interest rate is caleb being offered? 17.61% 19.19% 17.68% 19.33%

Solution:- Answer is 19.33%

Annual percentage rate (APR) is the yearly rate for a price which have to pay for borrowing money through credit card.

Here Caleb has an offer from a credit card issue for i=0% APR for the first 30 days.

now, effective interest rate for n= 30 days  

=

After 30 days APR =17.68%=0.1768

n=365-30=335 days

now the effective interest rate for n=335 days

=

=19.33%

So the effective interest rate for 365 days =0+19.33% =19.33%

So fourth option is correct.

good luck on your studies! : )

david edward.