1.) You have a credit card with an APR of 24%. You begin with a balance of $620. In the first month you make a payment of $450 and make new charges of $220. In the second month you make a paymen of $320 and make new charges of $90. Complete the following table. (Round VOur anSwers to tho nonrogt

1.) You have a credit card with an APR of 24%. You begin with a balance of $620. In the first month you make a payment of $450 and make new charges of $220. In the second month you make a paymen of $320 and make new charges of $90. Complete the following table. (Round VOur anSwers to tho nonrogt

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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Concept explainers

Risk and return

Before understanding the concept of Risk and Return in Financial Management, understanding the two-concept Risk and return individually is necessary.

Capital Asset Pricing Model

Capital asset pricing model, also known as CAPM, shows the relationship between the expected return of the investment and the market at risk. This concept is basically used particularly in the case of stocks or shares. It is also used across finance for pricing assets that have higher risk identity and for evaluating the expected returns for the assets given the risk of those assets and also the cost of capital.

Question

1.) You have a credit card with an APR of 24%. You begin with a
balance of $620. In the first month you make a payment of $450 and
make new charges of $220. In the second month you make a paymen
of $320 and make new charges of $90. Complete the following table.
(Round VOur anSwers to tho nonrogt

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On October 24, you plan to purchase a$1500 computer by using one of your two credit cards. The Silver Card charges 18% interest and calculates interest based on the balance on the first day of the previous month. The Gold Card charges 18% interest and calculates interest based on the average daily balance. Both cards have a s0 balance as of October 1. The closing date is the end of the month for each card. Your plan is te make a 00 payment in November, make a500 payment in December, and pay off the remaining balance in January, All your payments will be received and posted en the 1oth of each month. No other tharges will be made on the acount. (Round your answers to the nearest cent.) (a) Based on this information, calculate the interest (in s) charged by each card for this purchase Silver Card Gold Card (b) Which card is the better deal and by how much (in $)7 The Goid Card s the better deal by s49 02
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