Calculate Annual Profit of Credit Card Portfolio

Q: Calculate Annual Profit of Credit Card Portfolio

This question evaluates financial arithmetic and quantitative reasoning, including the ability to aggregate per-account revenues and costs while maintaining unit consistency across monthly and annual figures.

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Question

Portfolio Annual Profit Calculation

Context

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

Given

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

Task

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

Note

Monthly figures must be annualized before summing revenues and subtracting costs.