Jennifer Lee, an engineering major in her junior year, has received in the mail two guaranteed-line-of-credit applications from two different banks. Each bank offers a different annual fee and finance...

Jennifer Lee, an engineering major in her junior year, has received in the mail two guaranteed-line-of-credit applications from two different banks. Each bank offers a different annual fee and finance charge. Jennifer expects her average monthly balance after payment to be $500 and plans to keep the card she chooses for only 24 months. (After graduation, she will apply for a new card.) Jennifer's interest rate (on her savings account) is 8% compounded daily.

Terms                    Bank
A
Bank
B



Annual fee             $2S                                             Free
Finance charge     1.65% monthly interest rate       20% annual percentage rate
(a) Compute the effective annual interest rate for each card.
(b) Which bank's credit card should Jennifer choose?