Question

Credit card A has an APR of 18.9% and an annual fee of $40, while credit card B has an APR of 19.7% and no annual fee. All else being equal, at about what balance will the cards offer the same deal over the course of a year? (Assume all interest is compounded monthly.)

Answer 1

Credit card A: y= 0.189x + 40

Credit card B: y= 0.197x

Answer: $5000

Answer 2

The answer is 4195.14

Step-by-step explanation:Just plug in the balances and see which balance makes the same deal.

(B=balance)

Card 1: B(1+.186/12)^12+40

Card 2. B(1+.197/12)^12

Hope this helps you!