Your fico score makes a big difference in how lenders


Question: Your FICO score makes a big difference in how lenders determine what interest rate to charge you. Consider the situation faced by Edward and Jorge. Edward has a fairly poor FICO score of 660 and, as a result, pays 18.0% APR on the unpaid balance of his credit card. Jorge has a FICO score of 740 and pays only 7.3% APR on the unpaid balance of his credit card. If both persons carry an average balance of $3,000 on their credit cards for three years, how much more money will Edward repay compared with what Jorge owes (moral: you want a high FICO score)? Assume monthly compounding of interest.

Request for Solution File

Ask an Expert for Answer!!
Microeconomics: Your fico score makes a big difference in how lenders
Reference No:- TGS02301809

Expected delivery within 24 Hours