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You have a credit card with an APR of 16%, compounded monthly, that has a balance...

  1. You have a credit card with an APR of 16%, compounded monthly, that has a balance of $7,000. You want to transfer this balance to a different card with an APR of 14.5%, compounded monthly. Assuming that you will make the minimum payments of $150 per month for either card, what transfer fee would make you ambivalent between transferring or not?

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Formulae

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