1. Your credit card quotes annual rate of 22%. What is the effective annual rate on your credit card if you make monthly payments? b.By law, financial institutions are required to report the simple rate (no effects of compounding included). This rate is called Annual Percentage Rate (or APR). Suppose that you have a mortgage on your house and you calculate that with monthly payments, your effective annual rate is 7%. What APR should your bank quote?
2. You loaned a person $500 and you said that you would charge him 15% annual interest. If you get paid back, $110 per year, how many years will it take to pay this off?