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mia2286
mia2286
24.11.2020 • 
Mathematics

Oliver just got a new credit card and immediately made a purchase for $2500. The card offers a 0% APR for the first 90 days and a 17.99% APR afterward, compounded daily. Oliver doesn't expect to pay off the $2500 balance on the card for one year, nor does he expect to make any more purchases during the year. He wants to know how much money in interest the 0% APR for the first 90 days will save him. Help Oliver calculate the answer. Ignore any possible late payment fees. Part I: For how many days out of the year will Oliver pay interest at a 17.99% APR?

Part II: What is the effective interest rate offered by Oliver's credit card? Round your answer to two decimal places.

Part III: How much will Oliver pay in interest on the $2500 purchase over the course of the year?

Part IV: What would the effective interest rate have been if the APR had been 17.99%, compounded daily, for the whole year? Round your answer to two decimal places.

Part V: How much would Oliver have paid in interest on the $2500 purchase over the course of the year with the effective interest rate from Part IV?

Part VI: How much money in interest will the 0% APR for the first 90 days save Oliver?

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