Credit card A offers an introductory APR of 7.6% for the first 3 months and a standard APR of 23.4% thereafter, while credit car
d B offers an introductory APR of 7.9% for the first 3 months and a standard APR of 22.9% thereafter. All else being equal, which of these statements is correct? (Assume all interest is compounded monthly.) A. Credit card B is the better deal over the course of the first 3 months and over the course of the first year.
B. Credit card B is the better deal over the course of the first 3 months, but credit card A is the better deal over the course of the first year.
C. Credit card A is the better deal over the course of the first 3 months and over the course of the first year.
D. Credit card A is the better deal over the course of the first 3 months, but credit card B is the better deal over the course of the first year.
The Correct Answer is Credit card A is the better deal over the course of the first 3 months, but credit card B is the better deal over the course of the first year.
D. Credit card A is the better deal over the course of the first 3 months, but credit card B is the better deal over the course of the first year.
Explanation
An Introductory rate is low rate given by credit card companies to its clients as an incentive for card application. An introductory APR with a 0% offer simply means that a person is not required to pay interest on his or her purchase for a particular period of time. Introductory APR could last from 6 to 12 months. For the first 3 month, card A (7.6%) offers a better deal than card B(7.9%). Over the course of the year, card B(22.9%) offers a better deal than card A(23.4%)
Another effect of the spread of Islam was an increase in trade. Unlike early Christianity, Muslims were not reluctant to engage in trade and profit; Muhammad himself was a merchant. As new areas were drawn into the orbit of Islamic civilization, the new religion provided merchants with a safe context for trade.
