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What is the corresponding effective annual interest rate

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Reference no: EM131900159

Problem

1. A credit card company announces that its interest rate is 1.5% per month. What is the corresponding effective annual interest rate?

2. Your local bank has a promotional saving program that pays an interest rate of 6% per year compounded monthly. If you deposit $1,000 on January 1 in this bank, how much will you have in your account at the end of year 1 and year 2?

Reference no: EM131900159

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