As a College Student, You Probably Receive Many Credit Card

question 92

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 monthly. The second credit card charges 16.25 percent APR and compounds weekly. What is the effective annual rate of the cheaper card?

• A) 17.00 percent
• B) 17.62 percent
• C) 16.25 percent
• D) 18.39 percent

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Definitions:

Selling Costs

Expenses related to the sale of products or services, including advertising, sales commissions, and store expenses.

Assembly Supplies

Assembly supplies refer to materials and components used in the process of assembling finished goods, often accounted for as a part of manufacturing expenses.

Indirect Material Costs

Costs of materials that are used in the production process but do not become an integral part of the finished product.

Indirect Labor

Labor costs not directly tied to the production of goods or services, such as maintenance or administrative staff.