##### Scenario Existing portfolio of 500,000 active credit-card customers with multiple revenue and cost streams. ##### Question Given 500,000 active cards that each generate $79 annual fee, $2 other revenue per card per year, $15 interest revenue per card per month, and incur $5 fraud-prevention cost per card per month, calculate the portfolio’s annual profit. ##### Hints Convert monthly figures to annual, sum revenues, subtract costs.

Evaluates annual profit calculation for a credit-card portfolio with monthly and annual revenue and cost components. Strong answers annualize figures, compute per-card profit, and scale to portfolio profit.

How do I approach Statistics & Math interview questions?

Statistics & Math questions require understanding of core concepts and practice. PracHub provides solutions with explanations to help you master statistics & math interviews.

What difficulty level is this interview question?

This is a easy difficulty Statistics & Math question, commonly asked during HR Screen rounds at Capital One.

What role is this question designed for?

This question is commonly asked for Data Scientist candidates at Capital One during technical interviews.

Calculate Annual Profit of Credit Card Portfolio | Capital One Interview Question

Credit Card Portfolio Annual Profit

You manage a portfolio of 500,000 active credit-card accounts. Each active card generates multiple revenue streams and incurs a cost.

Given:

Annual fee: $79 per year
Other revenue: $2 per year
Interest revenue: $15 per month
Fraud-prevention cost: $5 per month

Calculate the portfolio's total annual profit. Show your steps and assumptions.

Constraints & Assumptions

Monthly figures must be annualized before summing.
Treat all 500,000 accounts as active for the full year.
Ignore taxes, charge-offs, rewards, servicing, funding costs, and acquisition costs unless stated.
Report both per-card annual profit and total portfolio profit.

Clarifying Questions to Ask

Are all accounts active for the full 12 months?
Are fraud-prevention costs the only costs included?
Should expected losses, rewards, servicing, and funding costs be excluded?
Are the revenue figures averages per active card?

What a Strong Answer Covers

Annualizes monthly interest revenue and monthly fraud-prevention cost.
Adds annual fee, other revenue, and annualized interest to get annual revenue per card.
Subtracts annualized cost to get per-card profit.
Multiplies per-card profit by 500,000 active accounts.
Presents the final answer clearly in dollars and notes excluded cost categories.

Follow-up Questions

How would the answer change if only 90% of cards are active all year?
What costs would you add for a full profitability model?
How would expected credit losses affect the calculation?

Credit Card Portfolio Annual Profit

You manage a portfolio of 500,000 active credit-card accounts. Each active card generates multiple revenue streams and incurs a cost.

Given:

Annual fee: $79 per year

Other revenue: $2 per year

Interest revenue: $15 per month

Fraud-prevention cost: $5 per month

Calculate the portfolio's total annual profit. Show your steps and assumptions.

Constraints & Assumptions

Monthly figures must be annualized before summing.

Treat all 500,000 accounts as active for the full year.

Ignore taxes, charge-offs, rewards, servicing, funding costs, and acquisition costs unless stated.

Report both per-card annual profit and total portfolio profit.

Clarifying Questions to Ask

Are all accounts active for the full 12 months?

Are fraud-prevention costs the only costs included?

Should expected losses, rewards, servicing, and funding costs be excluded?

Are the revenue figures averages per active card?

What a Strong Answer Covers

Annualizes monthly interest revenue and monthly fraud-prevention cost.

Adds annual fee, other revenue, and annualized interest to get annual revenue per card.

Subtracts annualized cost to get per-card profit.

Multiplies per-card profit by 500,000 active accounts.

Presents the final answer clearly in dollars and notes excluded cost categories.

Follow-up Questions

How would the answer change if only 90% of cards are active all year?

What costs would you add for a full profitability model?

How would expected credit losses affect the calculation?

Calculate Annual Profit of Credit Card Portfolio

Quick Overview

Calculate Annual Profit of Credit Card Portfolio

Credit Card Portfolio Annual Profit

Constraints & Assumptions

Clarifying Questions to Ask

What a Strong Answer Covers

Follow-up Questions

Write your answer

Calculate Annual Profit of Credit Card Portfolio

Quick Overview

Calculate Annual Profit of Credit Card Portfolio

Credit Card Portfolio Annual Profit

Constraints & Assumptions

Clarifying Questions to Ask

What a Strong Answer Covers

Follow-up Questions

Write your answer