Please solve part E Only Silver Visa, Fast Card, and Mach Express are three credit card companies that charge different interest onoverdue balances. Silver Visa charges 24% compounded daily, Fast Card charges 25% compounded weekly,and Mach Express charges 26% compounded monthly. (Hint: 1 year could be 365 or 52 weeks)a) What is the effective annual interest rate charged by each of the three credit cards?b) What is the effective semi-annual interest rate charged by each of the three credit cards?c) Which credit card would you prefer?d) How much should the interest rate be for Silver Visa in order to break-even with Fast Card?e) find effective quarterly rate charged by each credit cards

Given Silver Visa charges 24% compounded daily Fast card charges 25% compounded weekly Mach…

Answered: 2) Find effective quarterly rate…

Business

Economics

2) Find effective quarterly rate charged by each credit cards

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

See similar textbooks

Related questions

Q: A COMPANY IS STUDYING TO UPGRADE THEIR EQUIPMENT IN ORDER TO REDUCE COST BY P40,000.00 PER YEAR.…

A: A rate of return (RoR) is the net gain or loss of an investment over a particular period, indicate…

Q: Waa deposits $ 1250 per month in to an account that pays 6.2% interest annually. Calculate the money…

A: Future value (FV) determines the value of a present investment at a future date based on an assumed…

Q: 3) Cris, a dedicated employee at Google just found out that he will be recognized for the employee…

A: Income elasticity of demand is the responsiveness of quantity demanded of any good to the consumer's…

Q: 2. A manager hires labour and rents capital equipment in a very competitive market. Currently, the…

A: In the case of 2 variable inputs, labor(L) and capital(K), the firm maximizes output for a given…

Q: why is 1-l1 hours worked and not just l1 as it states in the question

A: You are absolutely right the working hours are lt because (1-lt) are the leisure hours which are…

Q: Beta and Gamma produce vitamin A at a constant average cost of $5 per unit. Assume that low-price…

A: The potential rewards to each firm depending on each probable outcome are shown in a payoff matrix,…

Q: Bell’s Amusements purchased an expensive ride for their theme and amusement park situated within a…

A: Given information Ride cost=$1.35 million=$1350000 Income =$420000 per year Operating…

Q: 7. Refer to Figure 14-1. Firms will be earn losses in the short run but will remain in business if…

A: A competitive market is one in which no single customer or producer has sway over the market. Its…

Q: The marginal propensity to consume is: the amount of consumption at a specific level of income.…

A: Consumers make use of their income for both consumption and saving purposes. Consumption is the…

Q: Stretch Problems Problem 4 Based on the graph below, explain what would happen to the optimal level…

A: For the above provided graph - Blue curve which is downward sloping represents the marginal cost…

Q: What is the Optimum level of the output for the firm? How do you know? Explain your answer. What is…

A: Since you have posted a question with multiple sub-parts, we will solve first three sub-parts for…

Q: the Price elasticity of demand is calculated as: Select one: O a. %AP/%AQD O b. %AQs/%AQD O c.…

A: Price elasticity of a good is the ratio of percentage change in the quantity demanded to the…

Q: Compare the levels of inequality among the di erent groups of households to each other and to the…

A: Theil index is the measurement method for racial inequality. It ranges between 0 to 1. 0 signifies…

Q: Suppose a consumer seeks to maximize the utility function U (x, y) = (x+2) (y + 1), where x and y…

A: For utility maximization the second-order condition we have to show the utility function is convex…

Q: 1. There are two types of individuals; low-risk individuals whose probability of an accident is 0.3,…

A: There are 2 types of consumers: Low risk: Income = $400 without accident Income= $100 with an…

Q: According to the most recent survey conducted by Statistics Bureau of Metropolis, currently there…

Q: If X follows a normal distribution with µ = 30 and σ = 4, what is P(X ≤27)? Answer Choices: a.…

A: X follows a normal distribution with mean (µ) equals to 30 and standard deviation (σ) equals to 4…

Q: Which of the following is NOT a government protected cartel program: Farm support programs OPEC…

A: Cartel refers to the combination of independent industrial or commercial enterprises to reduce the…

Q: Fill in the table below applying the cost equations.

A: Total cost = Total Fixed cost + Total variable cost Total variable cost = Average variable cost ×…

Q: a.What was world health and safety like before the current system? What were the drivers to create a…

A: To manage the health care and safety of employees in the work environment it is of utmost importance…

Q: The most frequent argument used to support trade barriers is that they O protect domestic jobs O…

A: Trade barriers refer to policies such as import tariffs and quotas.

Q: Use the information presented in Southwestern Mutual Bank's balance sheet to answer the following…

A: A leverage ratio is any one of several financial estimates that assesses the ability of a company to…

Q: Consider the following demand and supply equations: P = a. Draw a neatly labelled diagram showing…

A: Demand Equation is given as:- P = 20-5Q P = 10+2Q

Q: You’ve been given a firm’s production and cost functions: p = 132 −2q M C = 12 + 4q Assume this…

A: A monopoly is sole producer of a good this having maximum market power hence acts as a price maker.

Q: 2) Ernesto is looking to purchase a new vehicle as his income has increased from $2,000 per month to…

A: Income elasticity of demand is defined as the percentage change in the quantity demanded for a good…

Q: You have bought a car for $50,000. You were so excited. However, you then found out that the car you…

A: Formula for the future value of an asset is given as: F= P(1-d)t F: future value of the assetP :…

Q: The equation for a supply curve is P = 3Q - 8. What is the elasticity in moving from a price of 4…

A: Price elasticity of supply: It measures the percentage change in the quantity supplied for a 1%…

Q: If the risk premium is 2%, the nominal borrowing rate is 7% and the real borrowing rate is 5%, what…

A: Given:- Risk premium rate=2% Nominal borrowing rate=7% Real borrowing rate=5% Please find detailed…

Q: Suppose a consumer seeks to maximize the utility function U (x, y) = (x+2) (y + 1), where and y…

A: Given Consumer utility function: U(x,y)=x+2y+1 ...(1) Price of goods x and y are px and…

Q: 5. Before the North American Free Trade Agre (NAFTA) gradually eliminated import tariffs on goods,…

A: Consumer surplus refers to an economic measurement of buyers' benefits resulting from market…

Q: allocation might be both efficient and equitable, based on the Pareto principle." 3. In a…

A: Answer to the question is as follows:

Q: QUESTION 44 If France has a labor force of 30,000 hours of labor, after trade begins, it will…

A: Opportunity cost is the cost of producing one good in terms of other. Comparative advantage is when…

Q: A firm is considering hiring a worker and providing the worker with general training. The training…

A: The labor market is an important part of the business sector. The cost of a product or service…

Q: What is the difference between a monopoly and a monopsony? What happens when they meet? Explain

A: In economics the monopoly and monopsonies are related economic terms that explain the imbalanced…

Q: A project costing P250,000 yields a yearly benefit of P80,000 for a period of 10 years with no…

A: Conventional Benefit cost ratio =Present worth of Expected BenefitPresent worth of Expected cost

Q: Free Traders O limit placed on the quantities of a product that can be imported O people who favor…

A: There are two types of group of people, one who favor trade barriers and the other who are against…

Q: Which of the following is most likely to be a monopoly? local fast-food restaurant local electricity…

A: Monopoly is known as a market structure in which only one seller exists who has complete market…

Q: What is a legal entity owned by stockholders? O Corporation O Sole Proprietorship Limited Liability…

A: A sole proprietorship is a company that the founder and owner own and operate. Individuals can…

Q: 1. Given the following varied interest rates: 6% compounded monthly during the first year, 2% per…

A: The formula for present value: P=FP/F,i,n Where (P/F,i,n)=11+in Here i is the rate of interest per…

Q: A couple is interested in flipping houses (or the process of purchasing homes, make repairs, and…

Q: Question How will each of the following scenarios impact the market for labour The country…

A: Labor market : labor market is a market where the firms and households interacts. The firms demands…

Q: In order to prove that peanut butter and Jelly are complements, one should measure the and get a…

A: the price elasticity of demand depicts how much the consumer responds to the change in the price…

Q: Suppose over the next several years the level of income and wealth rises in the state of Florida.…

A: The equilibrium price is established where the demand and supply are equal. The change in the…

Q: When a famous painting becomes available for sale, it is often known which museum or collector will…

A: * SOLUTION :- From the above given information the answer is given below as

Q: Consider the following simple model of a common values auction. Two buyers each obtain a private…

A: There can be two possibilities for signal - High or Low And it is provided that provided that…

Q: A machine has a 1st cost of P 140,000 and a life of 8 years with a salvage value of P10,000 at the…

A: In the Double decline balance method, the asset depreciates more in the early year after buying and…

Q: What is the capitalized cost of a machine with an initial cost of $250,000, maintenance and…

A: Capitalised cost is the present worth of the project with infinite life. CC = A(P/A, i, n).

Q: Costs that do not vary with output are Question 8 options: a) fixed costs b) variable…

A: Cost of production is incurred throughout the economic process of manufacturing goods and services.…

Q: Explain how knowledge of trade theories and policies helps to understand the environment and develop…

A: The theories and policies of international trade are based on various models for different kinds of…

Q: The management of a soft drink company is interested in determining whether the proper amount of…

A: Null Hypothesis(H0) is a statistical inference that states that in a model with DV (dependent…

Question

Please solve part E Only

Silver Visa, Fast Card, and Mach Express are three credit card companies that charge different interest on
overdue balances. Silver Visa charges 24% compounded daily, Fast Card charges 25% compounded weekly,
and Mach Express charges 26% compounded monthly. (Hint: 1 year could be 365 or 52 weeks)
a) What is the effective annual interest rate charged by each of the three credit cards?
b) What is the effective semi-annual interest rate charged by each of the three credit cards?
c) Which credit card would you prefer?
d) How much should the interest rate be for Silver Visa in order to break-even with Fast Card?
e) find effective quarterly rate charged by each credit cards

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

SEE SOLUTION Check out a sample Q&A here

Step 1

Step 2

Step 3

Step 4

Step by step

Solved in 4 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.

Similar questions

You consider paying equal amounts of money into a bank account at regular intervals for 10 years. As a result of your research, you find out the following payment plans:a. To pay $500 at the end of each month for a period of 10 years with an interest rate 12% compounded monthly.b. To deposit $1500 at the end of every three months with an interest rate of 12% compounded continuously for 10 years.c. To deposit $1000 at the end of every two months with an interest rate 12% compounded quarterly for 10 years.For each of these payment plans, calculate the amount of money that will be accumulated in your account at the end of the 10th year (including the last payment). Which alternative would be more advantageous for you?
What is the amount of the quarterly deposits A such that you will be able to withdraw the amounts shown in the cash flow diagram if the interest rate is 9% compounded quarterly? The amount of the quarterly deposits A should be $. ( Round to the nearest dollar.) What is the amount of the quarterly deposits A such that you will be able to withdraw the amounts shown in the cash flow diagram if the interest rate is 9% compounded quarterly? 0 A 9% Compounded quarterly $1,300 1 1 The amount of the quarterly deposits A should be S. (Round to the nearest dollar.) 2 4 (Deposit) Quarters 6 7 $3,000 8 Q 2
If $3500 is deposited at the end of each quarter in an account that earns 7% compounded quarterly, after how many quarters will the account contain $70,000? (Round your answer UP to the nearest quarter.) quarters:
In one instance, a financial institution loaned you $60,000 for two years at an APR of 5.75% for which you must make monthly payments. In a second instance, you loaned a financial institution $60,000 for two years at an APR of 5.75% compounded monthly. What is the difference in the amount of interest paid? (Round your answer to the nearest cent.)
Jon’s grandfather was planning to give him $11,000 in 14 years. Jon has convinced him to pay him $7,000 now, instead. If Jon invests this $7,000 at 6.5% compounded continuously how much money will he have in 14 years? a) What type of problem is this? Select an answer Future Value -Simple Interest Future Value - Compound Interest Future Value - Continuously Compounded Future Value - Ordinary Annuity Future Value - Annuity Due Present Value - Ordinary Annuity Present Value - Annuity Due b) How much will he have? (round to the nearest cent) $
a.) How long will it take any sum to double itself with an 11% interest rate compounded continuously?b.) A credit card company charges a nominal 12% interest on overdue accounts, compounded daily. What is the effective interest rate?
To make CDs look more attractive as an investment than they really are, some banks advertise that their rates are higher than their competitors' rates; however, the fine print says that the rate is based on simple interest. If you were to deposit $16,000 at 10.00% per year simple interest in a CD, what compound interest rate would yield the same amount of money in 3 years? (Round the final answer to three decimal places.) The compound interest rate that would yield the same amount of money in 3 years is % per year.
5. Find the accumulated amount of P 1000 after 5 years when deposited in a bank at a rate of 16% compounded monthly. 6. How long in years will a certain sum of money to triple its amount when deposited at a rate of 12% compounded annually? 7. How much should be deposited in a bank at a rate of 12% compounded continuously for 5 years if its accumulated amount is P9,110.60? 8. An effective rate of interest, which is 12.75%, is equivalent to what percent if compounded continuously.
how much did you deposit at the end of each month in an IRA that pays 7% compounded monthly to earn $70,000 per year from interest alone, while leaving the principal untouched, to be withdrawn at the end of each year after you retire in 30 years?
Find the Effective Interest Rate Payment Period Payment Period Monthly Semi Annually 6% Compounded Quarterly Blank 1 % Blank 2 % 12% Compounded Blank 3% Blank 4 % Monthly 18 % Compounded Blank 5% Blank 6% Continuously Note: Final answer should be in percentage value. Round your answer to one decimal place. Example: 12.4% Blank 1 Add your answer Blank 2 Add your answer Blank 3 Add your answer Blank 4 Add your answer Blank 5 Add your answer Blank 6 Add your answer
How much Jim can accumulate in a private pension fund over 20 years if the fund offers 5% interest compounded annually, and he can afford to deposit $4000 at the end of every second year? (Note: 1st deposit made at the end of the 2nd year, and the last (10th) deposit made at the end of the 20th year)?
You have taken a loan of $85,000.00 for 26 years at 4.8% compounded quarterly. Fill in the table below: (Round all answers to 2 decimal places.) Payment number | Payment amount Principal Amount | Interest 0) 1) 2) 3) tA LA LA LA LA Balance $85,000.00 tA