Mary's credit card situation is out of control because she cannot afford to make her monthly payments. She has three credit cards with the following loan balances and APRS: Card 1, $5,000, 22%; Card 2, $5,800, 26%; and Card 3, $3,300, 19%. Interest compounds monthly on all loan balances. A credit card loan consolidation company has captured Mary's attention by stating they can save Mary 16% per month on her credit card payments. This company charges 16.5% APR. Is the company's claim correct? Assume a 10-year repayment period. Mary's current minimum monthly payments are $. (Round to the nearest cent.) Mary's minimum monthly payments after loan consolidation will be $ Is the company's claim correct? Choose the correct answer below. (Round to the nearest cent.) O A. No because Mary's monthly credit card payments will increase for more than 16%. O B. No because Mary's monthly credit card payments will decrease for less than 16%. O C. Yes because Mary's monthly credit card payments will decrease for more than 16%. O D. Yes because Mary's monthly credit card payments will increase for less than 16%.

Mary's credit card situation is out of control because she cannot afford to make her monthly payments. She has three credit cards with the following loan balances and APRS: Card 1, $5,000, 22%; Card 2, $5,800, 26%; and Card 3, $3,300, 19%. Interest compounds monthly on all loan balances. A credit card loan consolidation company has captured Mary's attention by stating they can save Mary 16% per month on her credit card payments. This company charges 16.5% APR. Is the company's claim correct? Assume a 10-year repayment period. Mary's current minimum monthly payments are $. (Round to the nearest cent.) Mary's minimum monthly payments after loan consolidation will be $ Is the company's claim correct? Choose the correct answer below. (Round to the nearest cent.) O A. No because Mary's monthly credit card payments will increase for more than 16%. O B. No because Mary's monthly credit card payments will decrease for less than 16%. O C. Yes because Mary's monthly credit card payments will decrease for more than 16%. O D. Yes because Mary's monthly credit card payments will increase for less than 16%.

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

Mary's credit card situation is out of control because she cannot afford to make her monthly payments. She has three
credit cards with the following loan balances and APRS: Card 1, $5,000, 22%; Card 2, $5,800, 26%; and Card 3,
$3,300, 19%. Interest compounds monthly on all loan balances. A credit card loan consolidation company has
captured Mary's attention by stating they can save Mary 16% per month on her credit card payments. This company
charges 16.5% APR. Is the company's claim correct? Assume a 10-year repayment period.
Mary's current minimum monthly payments are $
.(Round to the nearest cent.)
Mary's minimum monthly payments after loan consolidation will be $. (Round to the nearest cent.)
Is the company's claim correct? Choose the correct answer below.
O A. No because Mary's monthly credit card payments will increase for more than 16%.
B. No because Mary's monthly credit card payments will decrease for less than 16%.
C. Yes because Mary's monthly credit card payments will decrease for more than 16%.
D. Yes because Mary's monthly credit card payments will increase for less than 16%.

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