A furniture company has decided to drop the effective rate on its credit card by 2%. The store currently charges a periodic rate of 1.85% per month. What new periodic rate should the store advertise?

Periodic Rate

The interest rate applied to a financial loan or savings account that is compounded at regular intervals over a period of time.

Effective Rate

The actual interest rate an individual pays on a loan or earns on an investment, after compounding and other charges are factored in.

Credit Card

A plastic card issued by a bank or financial institution allowing the holder to purchase goods or services on credit.