Credit card A offers an APR of 27.29%, compounded monthly, while credit card B offers an APR of 27.12%, compounded daily. All else being equal, which card offers the better deal for the consumer?
Solution 1
The effective interest rate, also known as the effective annual interest rate, annual equivalent rate, or simply effective rate. The card which offers a better deal to the customer is Credit card A.
What is an effective rate of interest?
The effective interest rate, also known as the effective annual interest rate, annual equivalent rate, or simply effective rate, is the interest rate on a loan or financial product that is restated from the nominal interest rate and expressed as the equivalent interest rate if compound interest was payable annually in arrears. It is calculated by the formula,
EIR = [1+(i/n)]ⁿ - 1
The effective rate of interest on Credit Card A is,
Effective rate = [1+(i/n)]ⁿ - 1 = [1+(0.2729/12)]¹² - 1 = 30.97%
The effective rate of interest on Credit Card B is,
Effective rate = [1+(i/n)]ⁿ - 1 = [1+(0.2712/365)]³⁶⁵ - 1 = 31.14%
Since the effective rate of Credit card A is less than credit card B, therefore, the card which offers a better deal to the customer is Credit card A.
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Solution 2
📚 Related Questions
Rule of three:
Pasta People
(kilograms)
0.48 → 4
x ← 14
x=(14 * 0.48)/4
x=1.68
Answer: She will need 1.68 kilograms of pasta for 14 people
Answer:
1.68 kilo grams are required for 14 people.
Step-by-step explanation:
First of all the answer is required in kilo grams and the data given is in grams.
Lets convert the given value to kilo grams;
480 grams = 0.48 kilo grams
If 0.48 kilo grams are required to cater 4 people then how many kilo grams are required to cater 14 people?
⇒ kilo grams
1.68 kilo grams.
total amount of rice in one bag = 1/4
Number of bags needed = 5 1/4 ÷ 1/4 = 21/4 ÷ 1/4 = 21/4 x 4 = 21 bags
Answer: 21 bags.
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Answer: histogram
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1 Kilo
therefore, because a square has 4 straight sides with 4 right angles, it is a rectangle.
and a rectangle can have unequal adjacent sides, so it is not always a square