Let's say we have two credit cards from two different people. The first user's credit card has an interest rate of 5% APR on $500 of monthly spending. The second user's interest rate is 1% APR on $1000 of monthly spending. Let's say that each user pays off 60% of their statement each month. Which user would owe more in a year?

Let's say we have two credit cards from two different people. The first user's credit card has an interest rate of 5% APR on $500 of monthly spending. The second user's interest rate is 1% APR on $1000 of monthly spending. Let's say that each user pays off 60% of their statement each month. Which user would owe more in a year?

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

Let's say we have two credit cards from two different
people. The first user's credit card has an interest
rate of 5% APR on $500 of monthly spending. The
second user's interest rate is 1% APR on $1000 of
monthly spending. Let's say that each user pays off
60% of their statement each month. Which user
would owe more in a year?

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