Credit card A has an APR of 27.2% and an annual fee of $96, while credit card B has an APR of 30.3% and no annual fee. All else
1 answer:
Answer: D. P * (1 + 0.272/12)¹² + 96 = P * (1 + 0.303/12)¹²
Step-by-step explanation:
Credit Card A deal over the course of a year:
Payments are done per month so values need to be converted to monthly figures.
APR per month = 27.2%/12
Period = 1 year * 12 months = 12
= P * (1 + 27.2%/12)¹² + 96
Credit Card B deal over a year
= P * (1 + 30.3%/12)¹²
The Principal that will enable both cards to offer the same deal will therefore be:
P * (1 + 27.2%/12)¹² + 96 = P * (1 + 30.3%/12)¹²
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