6. Suppose that Avery gets a credit card in November, 2023. She spends $4,300 every month on the card, just as she had done with cash and always pays her statement balance in full. She closes the card in October 2025 and makes her final payment in November 2025. If she is able to earn 8.6% interest (compounded annually) in the stock market, how much extra money can she save by using this credit card instead of cash? For simplicity, assume that she faces no capital gains taxes and invests in stocks that offer no dividends.
6. Suppose that Avery gets a credit card in November, 2023. She spends $4,300 every month on the card, just as she had done with cash and always pays her statement balance in full. She closes the card in October 2025 and makes her final payment in November 2025. If she is able to earn 8.6% interest (compounded annually) in the stock market, how much extra money can she save by using this credit card instead of cash? For simplicity, assume that she faces no capital gains taxes and invests in stocks that offer no dividends.
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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Transcribed Image Text:6. Suppose that Avery gets a credit card in November, 2023. She spends $4,300
every month on the card, just as she had done with cash and always pays her
statement balance in full. She closes the card in October 2025 and makes her final
payment in November 2025. If she is able to earn 8.6% interest (compounded
annually) in the stock market, how much extra money can she save by using this
credit card instead of cash? For simplicity, assume that she faces no capital gains
taxes and invests in stocks that offer no dividends.
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