Question
Jarrod has narrowed his choice to two credit cards that may meet his needs. Card A has an interest rate of 21 percent. Card B
Jarrod has narrowed his choice to two credit cards that may meet his needs. Card A has an interest rate of 21 percent. Card B has an interest rate of 14 percent, but also charges a $50 annual fee. Jarrod will not pay off his balance each month, but will carry forward a balance of about $400 each month. Assume that interest is compounded daily. Which credit card should he choose?
Why doesn't effective yield work here?
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International Finance Theory and Policy
Authors: Paul R. Krugman, Maurice Obstfeld, Marc J. Melitz
10th edition
978-0133425895, 133425894, 978-0133423631, 133423638, 978-0133423648
