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Felipe transferred a balance of $3700 to a new credit card at the beginning of
the year. The card offered an introductory APR of 5.9% for the first 4 months
and a standard APR of 17.2% thereafter. If the card compounds interest
monthly, which of these expressions represents Felipe's balance at the end of
the year? (Assume that Felipe will make no payments or new purchases
during the year, and ignore any possible late payment fees.)
OA. ($3700) (1+0 052)*(1.0172)
B.
(83700)(1+0059) (1+0.172)
OC. ($3700)(1+0 59)*(1.0172)*
0.059
12
OD. $3700)(1+0.059)*(1+0.172)

Answer :

The expression that represents Felipe's balance at the end of the year is 3700 x [tex]( 1 + \frac{0.059}{4}) ^{4}[/tex] x [tex](1 + \frac{0.172}{8})^{8}[/tex].

What is the expression that represents the balance?

The equation that can be used to determine future value with compounding is:

FV = P (1 + r)^nm

  • Where:
    FV = Future value
  • P = Present value
  • R = interest rate
  • m = number of compounding
  • N = number of years

3700 x [tex]( 1 + \frac{0.059}{4}) ^{4}[/tex] x [tex](1 + \frac{0.172}{8})^{8}[/tex].

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