Question
You are considering two ways of financing a spring break vacation. You could put it on your credit card, at 18% APR, compounded monthly, or
You are considering two ways of financing a spring break vacation. You could put it on your credit card, at 18%
APR, compounded monthly, or borrow the money from your parents, who want an interest payment of
9% every six months. Which is the lower rate?(Note: Be careful not to round any intermediate steps less than six decimal places.)
The effective annual rate for your credit card is ______% round to two decimal points
The effective annual rate for the loan from your parents is _____% round to two decimal points
The option with the lower effective annual rate is _________
.
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