Question

Credit card A has an APR of 12.5% and an annual fee of $48, while credit card B has an APR of 15.4% and no annual fee. All else being equal, which of these equations can be used to solve for the principal, P, the amount at which the cards offer the same deal over the course of a year? (Assume all interest is compounded monthly.)

A. P(1+0.12512)12+$48=P(1+0.15412)12
B. P(1+0.12512)12+$4812=P(1+0.15412)12
C. P(1+0.12512)12-$4812=P(1+0.15412)12
D. P(1+0.12512)12-$48=P(1+0.15412)12

Answer 1

The Answer is A, P(1 + 0.125/12)12 + $48 = P(1 + 0.154/12)12

Step-by-step explanation:

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Answer 2

The correct answer to this question is letter
"A. P(1+0.12512)12+$48=P(1+0.15412)12"

The statement, "Credit card A has an APR of 12.5% and an annual fee of $48, while credit card B has an APR of 15.4% and no annual fee."

This means that
Credit A = 0.12512
Credit B = 0.15412

Add 1 to both Credit A and Credit B since it says "over the course of a year"
Lastly, add $48 to Credit A.