Answered

IDNLearn.com offers a unique blend of expert answers and community-driven insights. Discover the information you need from our experienced professionals who provide accurate and reliable answers to all your questions.

Use the following compound interest formula to complete the problem. A = P (1 StartFraction r over n EndFraction) superscript n superscript t Currently you have two credit cards, H and I. Card H has a balance of $1,186. 44 and an interest rate of 14. 74%, compounded annually. Card I has a balance of $1,522. 16 and an interest rate of 12. 05%, compounded monthly. Assuming that you make no purchases and no payments with either card, after three years, which card’s balance will have increased by more, and how much greater will that increase be? a. Card I’s balance increased by $53. 16 more than Card H’s balance. B. Card I’s balance increased by $13. 45 more than Card H’s balance. C. Card H’s balance increased by $35. 61 more than Card I’s balance. D. Card H’s balance increased by $49. 06 more than Card I’s balance.

Sagot :

Marvineetesh3idn

Credit cards are the card which is given by banks to the customers for withdrawing some amount beyond the account balance. The card I's is increased by $1579.3 than card H.

What is a credit card?

A credit card refers to a payment mechanism that helps both consumer and commercial business proceedings, including purchases and cash advances.

Computation of credit card's balance:

Amount of Card H after 3 years:

Given,

Principal(P) = $1,186.44

Interest Rate(r) = 14.74%

Number of time period(n) = 3 years.

Applying the above values in the formula given in the question:

[tex]\text{A} = \text{P}(1+ \dfrac{r}{n} )^n^t\\\\\\\text{A} =\$1,186.44(1+ \dfrac{14.74\%}{3} )^3\\\\\\\text{A}= \$1792.2[/tex]

Amount of Card I after 3 years:

Principal(P) = $1,522

Interest Rate(r) = 12.05%

A number of the time periods (n):

[tex]12\text{Months}\times3\text{Years} = 36 \text{Months}[/tex]

Again, apply the above values in the formula given in the question:

[tex]\text{A} = \text{P}(1+ \dfrac{r}{n} )^n^t\\\\\\\text{A} =\$1,522.16(1+ \dfrac{12.05\%}{12} )^3^6\\\\\\\text{A}= \$3,371.58[/tex]

Now we take the difference between both the credit cards, we have:

[tex]\text{Amount of Credit Card I}-\text{Amount of Credit Card H}\\\\=\43,371.58-\$1,792.2\\\\=\$1,579.38[/tex]

Therefore, card H's balance is decreased by $1579.3 than a card I.

Learn more about credit cards, refer to:

https://brainly.com/question/14716152

Thank you for contributing to our discussion. Don't forget to check back for new answers. Keep asking, answering, and sharing useful information. IDNLearn.com provides the best answers to your questions. Thank you for visiting, and come back soon for more helpful information.