High School

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Credit card A has an APR of 12.5% and an annual fee of $48, while credit card B has an APR of 15.4% and no annual fee. All else being equal, which of these equations can be used to solve for the principal, [tex]P[/tex], the amount at which the cards offer the same deal over the course of a year? (Assume all interest is compounded monthly.)

A. [tex]P(1+\frac{0.125}{12})^{12} + 48 = P(1+\frac{0.154}{12})^{12}[/tex]
B. [tex]P(1+\frac{0.125}{12})^{12} + \frac{48}{12} = P(1+\frac{0.154}{12})^{12}[/tex]
C. [tex]P(1+\frac{0.125}{12})^{12} - \frac{48}{12} = P(1+\frac{0.154}{12})^{12}[/tex]
D. [tex]P(1+\frac{0.125}{12})^{12} - 48 = P(1+\frac{0.154}{12})^{12}[/tex]

Answer :

Answer:

The Answer is A, P(1 + 0.125/12)12 + $48 = P(1 + 0.154/12)12

Explanation:

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Rewritten by : Barada

The correct answer to this question is letter
"A. P(1+0.12512)12+$48=P(1+0.15412)12"

The statement, "Credit card A has an APR of 12.5% and an annual fee of $48, while credit card B has an APR of 15.4% and no annual fee."

This means that
Credit A = 0.12512
Credit B = 0.15412

Add 1 to both Credit A and Credit B since it says "over the course of a year"
Lastly, add $48 to Credit A.