Question 2

Q7. Suppose you received in your mailbox, a pre-approved credit card application from Flight-by-Day bank, offering an introductory interest rate of 12.00 percent per year, compounded monthly for the first 6 months, increasing thereafter to 24 percent per year (months 7 to 12), compounded monthly. Assuming you transferred/borrowed $3000 from this card and made no subsequent payments, how much interest will you owe at the end of the year? (A time-line might help you see the clear picture) (4 points) 2 Q8. You work in a bank, one of your customers e-transferred $500,000 into his account five years ago. Today, five years later, your customer asks you what annual return has he been earning on his account. The account has a $750,000 in it today. What compounded annual return has the customer earned? (3pts)