Jessica is very proud of herself for having $5,000 in her savings account that pays 4 percent interest. She currently has a balance of $2,300 on her credit card account that charges 21 percent interest. Jessica thinks she is making a wise financial decision by keeping her money in her savings account instead of paying off her credit card balance. What financial principle from Chapter 1 would you use to give her good advice

Missing options:

A. Taxes affect personal financial decisions.

B. The time value of money.

C. Mind games, financial personality, and your money

D. Both A and C.

D. Both A and C.

Explanation:

Jessica earns a small interest on her savings account and she will need to include that earned interest in her tax returns. Her credit card also charges her an interest, which is much higher, but that interest is not tax deductible. So besides paying a lot of interest for money that she shouldn't owe, the small interest received will decrease since she will pay taxes for it.

Besides the tax effect on the interests that she earns, the interest charged by the credit card is much higher. Assuming Jessica only pays 10% marginal tax rate:

answer; microeconomics;

answer///the madrid protocol;