PFIN (with PFIN Online, 1 term (6 months) Printed Access Card) (New, Engaging Titles from 4LTR Press)
6th Edition
ISBN: 9781337117005
Author: Randall Billingsley, Lawrence J. Gitman, Michael D. Joehnk
Publisher: Cengage Learning
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Chapter 6, Problem 7FPE
Summary Introduction
To identify: The credit card representing the better deal for Person OH in two cases
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Otis Hopkins recently graduated from college and is evaluating two credit cards. Card A has an annual fee of $75 and an interest rate of 9 percent. Card B has no annual fee and an interest rate of 16 percent. Assuming that Otis intends to carry no balance and to pay off his charges in full each month, which card represents the better deal? If Otis expected to carry a significant balance from one month to the next, which card would be better ? Explain.
Jarrod has narrowed his choice to two credit cards that may meet his needs. Card A has an APR of 22%. Card B has an APR of 22%, but also charges a $40 annual fee. Jarrod will not pay off his balance each month, but will carry a balance forward of about $699 each month. Which credit card should he choose? his total anual expense for card A will be ? round to the nearest cent
answer this fucking question or else because i really need this answer.
John spends $600 using a new credit card. The credit card has a limit of $1,000 with a $35 late fee, a $35 over-limit fee, a 0% introductory APR for 12 months, and a 19.9% APR on purchases after the introductory period. If John does not use the card to purchase anything else, how much must he pay every month during the first year to avoid any fees? If he ends up with a balance of $30 after the first year, what charges will apply?
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Chapter 6 Solutions
PFIN (with PFIN Online, 1 term (6 months) Printed Access Card) (New, Engaging Titles from 4LTR Press)
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- Can you please explain in detail how to work out this problem? Lane French had a bad credit rating and went to a local cash center. He took out a $300 loan payable in one month at $310. What is the percent of interest paid on this loan? Round your answer to the nearest hundredth of a percentarrow_forwardPaige is planning on depositing $1,000 in one of two different savings accounts from two financial institutions: MoneyFirst and MakeCents. The MoneyFirst account offers an interest rate of 0.15% APR, compounded monthly. The MakeCents account offers an interest rate of 0.14% APR, compounded weekly. Which is the better financial decision: the higher interest rate or the more frequent compounding? Higher interest rate More frequent compoundingarrow_forwardFlip opened a credit card account. During the first month he purchased new cloths that totaled $1,505.57 and then put the card in a desk drawer and didn’t use it again. The structure of the minimum monthly payment is the interest charge plus an additional 1.9% of the remaining balance. If Flip only makes the minimum monthly payment, how long will it take for the remaining balance to be half the amount of Flip's original purchases?arrow_forward
- 1. If you are trying to build credit by using a credit card, each time you make a purchase with the credit card, deduct that amount from your checking account. That way, when your credit card bill is due, you will have enough to pay the credit card off in full. Lizzie is going to start doing this. She plans on paying her credit card bill in full this month. How much does she owe with a 6% APR and the following transactions? (Round your answer to the nearest cent.) 31-day billing cycle 10/1 Previous balance $ 1,170 10/3 Credit $ 73 cr. 10/12 Charge: King Soopers 154 10/15 Payment 370 cr. 10/25 Charge: Delta 327 10/30 Charge: Holiday Fun 67arrow_forwardMaria is a graduate student; she borrows some money to buy a new car at the beginning of her graduation year. The car dealership allows her to defer payments for 12 months. Then Maria makes 48 end-of month payments thereafter. If the original note (loan) is for $30,000 and interest in 2% per month on the unpaid balance, how much will Maria’s payment be? Please Include equations used and cashflow diagramarrow_forwardJennifer Lee, an engineering major in her junior year, has received in the mail two guaranteed-line-of-credit applications from two different banks. Each bank offers a different annual fee and finance charge. Jennifer expects her average monthly balance after payment to be $500 and plans to keep the card she chooses for only 24 months. (After graduation, she will apply for a new card.) Jennifer's interest rate (on her savings account) is 8% compounded daily. (a) Compute the effective annual interest rate for each card.(b) Which bank's credit card should Jennifer choose?arrow_forward
- After visiting several automobile dealerships, Richard selects the car he wants. He likes its $10,500 price, but financing through the dealer is no bargain. He has $2,100 cash for a down payment, so he needs an $8,400 loan. In shopping at several banks for an installment loan, he learns that interest on most automobile loans is quoted at add-on rates. That is, during the life of the loan, interest is paid on the full amount borrowed even though a portion of the principal has been paid back. Richard borrows $8,400 for a period of two years at an add-on interest rate of 10 percent. a) What is the total interest on Richard’s loan? b) What is the total cost of the car? c) What is the monthly payment? d) What is the annual percentage rate (APR)?arrow_forwardYou have a credit card with an APR of 16%, compounded monthly, that has a balance of $7,000. You want to transfer this balance to a different card with an APR of 14.5%, compounded monthly. Assuming that you will make the minimum payments of $150 per month for either card, what transfer fee would make you ambivalent between transferring or not?arrow_forwardYou want to open a checking account with a $500 deposit. You estimate you will write 16 checks a month and use an ATM from other banks about twice a week. Bank A charges $1.40 per check if you drop under a minimum balance of $100, but you can use another bank’s ATM without a fee. Bank B has free checking but charges $1.40 each time you use another bank’s ATM. Calculate the difference in fees between the two banks over the course of a year for the following scenarios. a. your balance slips below $100 every month b. Your balance slips below $100 every other month, but you are now able to pay a bill online each month, dropping the number of checks you have to write to fifteen monthly. You also find you are only using the other bank’s ATM about once a week. c. You maintain a minimum balance of $500, write nine checks a week, and use another bank’s ATM only about once a month.arrow_forward
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