Problem:
As a jewelry store manager, you want to offer credit, with interest on outstanding balances paid monthly. To carry receivables, you must borrow funds from your bank at a nominal 6%, monthly compounding. To offset your overhead, you want to charge your customers an EAR (or EFF%) that is 1% more than the bank is charging you.
Required:
Question: What APR rate should you charge your customers?
Note: Elucidate all calculation and formulas.