Question

Credit card A has an APR of 20.8% and an annual fee of $60, while credit card B has an APR of 24.6% and no annual fee. All else being equal, which of these equations can be used to solve for the principal, P, the amount at which the cards offer the same deal over the course of a year? (Assume all interest is compounded monthly.) A. P•(1 + 0.208/12)12 - $60•12 = P•(1 + 0.246/12)12 B. P•(1 + 0.208/12)12 + $60•12 = P•(1 + 0.246/12)12 C. P•(1 + 0.208/12)12 - $60 = P•(1 + 0.246/12)12 D. P•(1 + 0.208/12)12 + $60 = P•(1 + 0.246/12)12

Answer 1

Answer: ITS OPTION D

Step-by-step explanation: i just got it right on APEX DHSIDOSOSSJ

Answer 2

Answer:

Option D is right answer.

Step-by-step explanation:

Given APR of card A = 20.8%, monthly rate is 0.208/12

n = 12 as interest is compounded monthly.

t = 1 year

The annual fee of card A is $60.

So, formula for compound interest is $A=P(1+\frac{r}{n})^{nt}$

Putting the values in formula:

A= $P(1+0.208/12)^{12}$ +60 (annual fee)

For card B :

APR is 24.6% or monthly 0.246/12

n = 12 and t = 1

Putting these values in formula :

$A=P(1+0.246/12)^{12}$

Hence, as per the result from formulas, we can see that option D is correct one.