Part A: You receive a credit card application from Shady Banks Savings and Loan
ID: 2675198 • Letter: P
Question
Part A:You receive a credit card application from Shady Banks Savings and Loan offering an introductory rate of 1.5 percent per year, compounded monthly for the first six months, increasing thereafter to 18 percent compounded monthly. Assuming you transfer the $5,000 balance from your existing credit card and make no subsequent payments, you will owe $_____________ in interest at the end of the first year. (Do not include the dollar sign ($). Round your answer to 2 decimal places. (e.g., 32.16))
MC Part B:
An ordinary annuity is best defined by which one of the following?
A unequal payments that occur at set intervals for a limited period of time
B increasing payments paid forever
C equal payments paid at regular intervals over a stated time period
D increasing payments paid for a definitive period of time
E equal payments paid at regular intervals of time on an ongoing basis
Explanation / Answer
<p>You receive a credit card application from Shady Banks Savings and Loan offering an introductory rate of 1.5 percent per year, compounded monthly for the first six months, increasing thereafter to 18 percent compounded monthly. Assuming you transfer the $5,000 balance from your existing credit card and make no subsequent payments, you will owe $_____________ in interest at the end of the first year. (Do not include the dollar sign ($). Round your answer to 2 decimal places. (e.g., 32.16))</p>
=5,000 (1+ o.015/100)^6x (1+ 0.18/100)^6 -5000=
<p>5864.90077-$5,000=864.9
<p>=============MC Part B:
An ordinary annuity is best defined by which one of the following?
A unequal payments that occur at set intervals for a limited period of time
B increasing payments paid forever
C equal payments paid at regular intervals over a stated time period
D increasing payments paid for a definitive period of time
E equal payments paid at regular intervals of time on an ongoing basis