Determine the annual effective rate of a credit card offering 1.3% monthly.

A) 16.77%
B) 16.47%
C) 16.07%
D) 15.77%
E) 15.47%

The annual effective rate (AER) can be calculated using the formula for compound interest: $AER=(1+r{)}^n-1$ , where $r$ is the monthly interest rate and $n$ is the number of compounding periods in a year. Given a monthly rate of 1.3%, or 0.013 in decimal form, and 12 compounding periods (months) in a year, the calculation is $AER=(1+0.013{)}^{12}-1$ . This equals approximately 0.1677 or 16.77% when converted to a percentage.