You are considering two ways of financing a spring break vacation. You could put it on your credit card, at 14% APR, compounded monthly, or borrow the money from your parents, who want an interest payment of 10% every six months. Which is the lower rate? (Note: Be careful not to round any intermediate steps less than six decimal places.) The effective annual rate for your credit card is%. (Round to two decimal places.)
You are considering two ways of financing a spring break vacation. You could put it on your credit card, at 14% APR, compounded monthly, or borrow the money from your parents, who want an interest payment of 10% every six months. Which is the lower rate? (Note: Be careful not to round any intermediate steps less than six decimal places.) The effective annual rate for your credit card is%. (Round to two decimal places.)
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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b) The effective annual rate for the loan from your parents is %. (Round to two decimal places.)
C) The option with the lower effective annual rate is
Transcribed Image Text:You are considering two ways of financing a spring break vacation. You could put it on your credit card, at 14%
APR, compounded monthly, or borrow the money from your parents, who want an interest payment of 10%
every six months. Which is the lower rate? (Note: Be careful not to round any intermediate steps less than six
decimal places.)
The effective annual rate for your credit card is%. (Round to two decimal places.)
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