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GoodMad_ GoodMad_
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7 years ago
Page Litton likes to use her credit card to buy gas since she can defer payment for 30 days. However, she notices that her dealer charges 3 cents more per gallon than if she paid with cash. Page estimates paying about $1.00 a gallon for gas, and her monthly credit statement shows an APR of 18 %. Given this information, Page should
A) pay with cash since its opportunity cost is about 36% a year.
B) continue using her card since the opportunity cost of paying in cash is less than 18% a year.
C) you can't tell unless you know how much gas she will buy.
D) continue using her card, the effective cost of using cash is about 36% a year.
Textbook 
Personal Finance: An Integrated Planning Approach

Personal Finance: An Integrated Planning Approach


Edition: 8th
Author:
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imoyseimoyse
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GoodMad_ Author
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#2
7 years ago
I'll mark it solved, you deserve it
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