Problema Solution
Bank A offers a credit card charging 1.4% per month of one's average daily balance and no annual fee. Bank B offers a credit card charging 1.25% per month and an annual fee of $X. What value of $X would make both cards the same if your average daily balance is usually $1,200?
My answer = $21.60
Answer provided by our tutors
Average daily balance is $1200.
For Bank A credit card holder
Annual charge on card = 12*(1.4/100)*(1200)= $201.6
For bank B credit card holder
Assume annual fee is $X
then annual charge on card = 12*(1.25/100)*(1200) + X = $(180 + X)
Since, we want to make both cards same , X must be equal to (201.6-180) = $21.6