On October 23, you plan to purchase a $1,200 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 $0 balance as of October 1. The closing date is the end of the month for each card. Your plan is to make a $400 payment in November, make a $400 payment in December, and pay off the remaining balance in January. All your payments will be received and posted on the 10th of each month. No other charges will be made on the account. (Round your answers to the nearest cent.) (a) Based on this information, calculate the interest (in $) charged by each card for this purchase. Silver Card$_______ Gold Card$______ (b) Which card is the better deal and by how much (in $)?
On October 23, you plan to purchase a $1,200 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 $0 balance as of October 1. The closing date is the end of the month for each card. Your plan is to make a $400 payment in November, make a $400 payment in December, and pay off the remaining balance in January. All your payments will be received and posted on the 10th of each month. No other charges will be made on the account. (Round your answers to the nearest cent.) (a) Based on this information, calculate the interest (in $) charged by each card for this purchase. Silver Card$_______ Gold Card$______ (b) Which card is the better deal and by how much (in $)?
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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On October 23, you plan to purchase a $1,200 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 $0 balance as of October 1. The closing date is the end of the month for each card.
Your plan is to make a $400 payment in November, make a $400 payment in December, and pay off the remaining balance in January. All your payments will be received and posted on the 10th of each month. No other charges will be made on the account. (Round your answers to the nearest cent.)
(a)
Based on this information, calculate the interest (in $) charged by each card for this purchase.
Silver Card$_______ Gold Card$______
(b)
Which card is the better deal and by how much (in $)?
Transcribed Image Text:On October 23, you plan to purchase a $1,200 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 $0 balance as of October 1. The
closing date is the end of the month for each card.
Your plan is to make a $400 payment in November, make a $400 payment in December, and pay off the remaining balance in January. All your payments will be received and posted on
the 10th of each month. No other charges will be made on the account. (Round your answers to the nearest cent.)
(a) Based on this information, calculate the interest (in $) charged by each card for this purchase.
Silver Card
Gold Card
$
(b) Which card is the better deal and by how much (in $)?
The Gold Card v
is the better deal by $
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