Jennifer Lee, an engineering major in her junior year, has received in the mail two guaranteed lineofcredit

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Jennifer Lee, an engineering major in her junior year, has received in the mail two guaranteed line€of€credit applications from two different banks. Each bank offers a different annual fee and finance charge. Jennifer expects her average monthly balance after payment to be $300 and plans to keep the card she chooses for only 24 months. (After graduation, she will apply for a new card.) Jennifer€™s interest rate (on her savings account) is 6% compounded daily.

Terms Annual fee Bank A Bank B $20 1.55% monthly interest rate Free Finance charge 19.5% annual percentage rate

(a) Compute the effective annual interest rate for each card.
(b) Which bank€™s credit card should Jennifer choose?

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