Introduction: Credit cards operate as loans with compound interest, with a grace period where the loan does not accrue interest (usually a month). The benefit is they are a safe way to access money; if your card and/or card number is stolen, you can call the credit card company to cancel the card. Some cards even provide rewards for timely payment of loans. However, if the loan is not payed off, they can accrue interest at an alarming rate. Question 1: Most credit cards have upwards of 16% annual interest compounded daily. Compute the annual yield for this interest; what does this suggest about this typical credit card interest rate?. Question 2: Suppose Bob has a credit card with 16% interest compounded daily; if Bob does not pay off a $100 purchase on his card at the end of the month, compute the future value of the loan after a week. Question 3: Suppose after the first week, Bob makes an additional $100 purchase and continues to not pay off his loan. Compute the size of his debt after three more weeks. Question 4: At this point, Bob realizes his debt is growing at an alarming rate; he starts making daily payments to curb its growth. How much does he need to pay to counteract the interest (that is, keep the future value constant each day)? Question 5: Suppose Alice has a card with 20% interest compounded daily. She makes a purchase, but forgets to pay it off. After two months, she has accrued $2000 of debt. What was the size of the initial purchase? Question 6: What do you conclude about credit card loans