QuestionAugust 16, 2025

A credit card issuer charges an APR of 10.82% and its billing cycle is 30 days long. What is its periodic interest rate? A. 0.89% B 11.37% 1.11% D. 11.43%

A credit card issuer charges an APR of 10.82% and its billing cycle is 30 days long. What is its periodic interest rate? A. 0.89% B 11.37% 1.11% D. 11.43%
A credit card issuer charges an APR of 10.82%  and its billing cycle is 30 days
long. What is its periodic interest rate?
A. 0.89% 
B 11.37% 
1.11% 
D. 11.43%

Solution
4.3(264 votes)

Answer

A. 0.89\% Explanation 1. Convert APR to Daily Rate Divide the APR by 365 days: \frac{10.82\%}{365} = 0.02965\%. 2. Calculate Periodic Interest Rate Multiply daily rate by billing cycle days: 0.02965\% \times 30 = 0.8895\%.

Explanation

1. Convert APR to Daily Rate<br /> Divide the APR by 365 days: $\frac{10.82\%}{365} = 0.02965\%$.<br />2. Calculate Periodic Interest Rate<br /> Multiply daily rate by billing cycle days: $0.02965\% \times 30 = 0.8895\%$.
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