Solve the problem. Two competitive banks offer credit cards Bank x charges 1.4%

Question

Solve the problem. Two competitive banks offer credit cards Bank x charges 1.4% per month on the unpaid balance and no annual fee. Bank Y charges 1.1% per month with an annual fee of exist60. Suppose your average unpaid balance is exist600. Which bank's card is the better choice for you? A) Bank Y B) They are the same. C) Bank X Find the APR (true annual interest rate), to the nearest half percent, for the following loan. Amount Financed = exist3400 Finance Charge = exist470 Number of Monthly Payments = 36 A) 9% B) 8% C) 8.5% D) 95% Solve the problem. An item is purchased for exist2500 with a down payment of exist500. There is a finance charge of exist150. Find the monthly payment if 20 Payments are made. A) exist132.50 B) exist107.50 C) exist100.00 D) None of the above is correct. Use the Rule of 78 to find the payoff amount for the loan paid in full before the date of maturity. Finance charge: exist717 Total number of payments 41 Amount per payment exist155 Remaining number of payments, when paid in full: 10 A) exist1504.20 B) exist1667.53 C) exist1512.53 D)exist1659.20 Use the actuarial method to find the payoff amount for the loan paid in full before its due date. Regular Monthly Payment: exist208.49 APR: 10% Remaining Payments After Payoff: 6 A) exist1394.38 B) exist1423.70 D)exist1422.11 D) exist1345.80

Explanation / Answer

8)Bank X

cost = 600*1.4%*12 = 100.8

Bank Y -

cost - 60+ 600*1.1%*12 = 139.2

since 100.8 < 139.2 ,

Bank X is better

option C is correct

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