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You just got to the register at JCrew after shopping for a new wardrobe. After ringing...

You just got to the register at JCrew after shopping for a new wardrobe. After ringing up all your items the bill is $1,285. The cashier offers you 10% off if you open up a new credit card. The credit card has an APR of 28% (compounding is daily). You planned on making $50 monthly payments on your credit card which has an APR of 14%. How long will it take to pay off the credit card (assuming that is the only charge) if you use your card versus opening a JCrew card. (Ignore the negative impact on your credit score.) Hint: turn the daily rate into an effective monthly rate. Show your work.

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jeff jeffy answered 1 year ago
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