Chrissy currently has a credit card that charges 11 percent simple interest annually. She usually carries a balance of about $250 . Chrissy has received an offer for a new credit card with a teaser rate of 4 percent for the first three months; after that, the rate increases to 15.5 percent. Assume that interest is compounded daily and there are 365 days in a year. What will her total annual interest be with her current card? What will her interest be the first year after she switches? Should she switch based on the first year interest?
Chrissy currently has a credit card that charges 11 percent simple interest annually. She usually carries a balance of about $250 . Chrissy has received an offer for a new credit card with a teaser rate of 4 percent for the first three months; after that, the rate increases to 15.5 percent. Assume that interest is compounded daily and there are 365 days in a year. What will her total annual interest be with her current card? What will her interest be the first year after she switches? Should she switch based on the first year interest?
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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Chrissy currently has a credit card that charges 11 percent simple interest annually. She usually carries a balance of about $250 . Chrissy has received an offer for a new credit card with a teaser rate of 4 percent for the first three months; after that, the rate increases to 15.5 percent. Assume that interest is compounded daily and there are 365 days in a year. What will her total annual interest be with her current card? What will her interest be the first year after she switches? Should she switch based on the first year interest?
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