Question

(15 Points!)

Answer 1

Answer: A) Card A because it has a lower APR

Step-by-step explanation:

Since, the card A has 16% of APR and $ 40 as annual fees,

Therefore, the total payment after one year by card A = 16 % of $ 450 + $ 40

= 16 × 4.50 + 40

= 72 + 40

= $ 112

Now, the card B has 21% of APR and $ 35 as annual fees,

Therefore, the total payment after one year by card B = 21 % of $ 450 + $ 35

= 21 × 4.50 + 40

= 94.5 + 35

= $ 129.5

Since, 129.5 > 112

⇒ Card A has the less payment than that of card B, because it has lower APR,

Thus, Option A is correct.

Answer 2

I would say D) because even though it has a higher ARP but it does have a lower annual fee