Mary's credit card situation is out of control because she cannot afford to make her monthly payments. She has three credit cards with the following loan balances and APRs: Card 1, $4,700 ,20 %;
Card 2, $5,700 ,24 %; and Card 3, $3,200 ,17 %. Interest compounds monthly on all loan balances. A credit card loan consolidation company has captured Mary's attention by stating they can save Mary 26 % per month on her credit card payments. This company charges 16.5 % APR. Is the company's claim correct? Assume a 10 -year repayment period.
Mary's current minimum monthly payments are $----------. (Round to the nearest cent.)
Mary's minimum monthly payments after loan consolidation will be $ ----------. (Round to the nearest cent.)
Is the company's claim correct? Choose the correct answer below.
A. Yes because Mary's monthly credit card payments will decrease for more than 16 %.
B. No because Mary's monthly credit card payments will decrease for less than 16 %.
C. Yes because Mary's monthly credit card payments will increase for more than 16 %.
D. No because Mary's monthly credit card payments will increase for less than 16 %.