As a College Student, You Probably Receive Many Credit Card

question 76

Multiple Choice

As a college student, you probably receive many credit card offers in the mail. Consider these two offers. The first card charges a 17 percent APR. An examination of the footnotes reveals that this card compounds daily (365 day year) . The second credit card charges 18 percent APR and compounds semiannually. What is the effective annual rate of the cheaper card?

• A) 18.00 percent
• B) 17.00 percent
• C) 18.81 percent
• D) 18.53 percent

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Definitions:

Transactive Memory

A process by which members of a small group remember different kinds of information.

Group Bond

The sense of solidarity or attachment among members of a group, fostering unity and support.

Groupthink

The tendency of group members to think alike, especially when doing so leads to bad decisions.

Commons Dilemma

A situation in which individuals or groups must balance personal interests with the collective good in the management and consumption of shared resources, often leading to conflicts over resource distribution.