Credit vs. Cash Answers

Which of the following statements is not true of cash advances? a. Credit card companies offer easy access to cash through ATM’s or checks that can be written to yourself and cashed. b. Credit card companies apply payments to cash advance balances first because the interest is higher. c. The APR of a cash advance is higher than that of regular credit card purchases. d. Credit card companies place limits on the amount of cash you can receive through a cash advance. Please select the best answer from the choices provided

Sam is getting ready for a big date when he realizes that he has no money. His roommate, Bill, also has no money, but he has a credit card. Knowing that nobody will let Sam use Bill’s credit card, Sam asks Bill to pull out a cash advance for $120.00. Bill agrees under the condition that Sam is responsible for all interest that accrues on the cash advance which is a 30% interest rate, compounded monthly. The $120 cash advance is repaid in monthly installments over 5 years. How much should Bill ask Sam to pay in interest for the cash advance? a. $3.88 b. $112.80 c. $120.00 d. $232.80 Please select the best answer from the choices provided

Bill was going to purchase a new mountain bike with his credit card, which he thought had an APR of 13%. His plan was to keep his payments around $75 per month for 24 months. He then found out that his credit card actually had an APR of 17%. Which of the following would not allow Bill to purchase a bike while keeping the same monthly payment?a.Purchase a bike that costs less.b.Wait for the bike he wants to go on sale for a cheaper price.c.Purchase the bike in a part of town with a higher sales tax rate.d.Increase the number of months he wants to use to pay off the balance.

Looking for some furniture for her new apartment, Susan visits the local swap meet in search of something cheap. Knowing that most swap meet vendors will not accept credit cards and that she will not have any money until her next payday, Susan decides to take out a $200 cash advance on her credit card at an interest rate of 32%.If Susan had no previous balance on her credit card, and she manages to pay off the balance within 1 month, how much will she have to pay in interest?a.$5.33b.$32.00c.$173.33d.$205.33

Looking for some furniture for her new apartment, Susan visits the local swap meet in search of something cheap. Knowing that most swap meet vendors will not accept credit cards and that she will not have any money until her next payday, Susan decides to take out a $200 cash advance on her credit card at an interest rate of 32%.If Susan had no previous balance on her credit card, and she manages to pay off the balance within 1 month, how much will she have to pay in interest?a.$5.33b.$32.00c.$173.33d.$205.33

Which answer choice does not represent an advantage to using credit cards over other forms of payment?a.payments made online with credit cardb.payments made abroad with credit cardc.emergency contact number for lost cardd.interest due on outstanding balance

Tom is in dire need of a new washing machine. He knows what model he would like to get, but doesn't have the cash to pay for it. He plans to get a line of credit (credit card) at the store when he purchases his new washer. He found four different stores that carry the same washing machine for different prices. The lines of credit they offer also come with different APRs. Tom's primary goal is to minimize his monthly payment as he pays the washing machine off over the next 18 months. From which of the four stores should Tom purchase his washing machine? StorePrice ($)Credit Card APRBob's Nuts and Bolts$450.0021%Steve's Scratch and Dent$405.0022%Wally's Washing Machines$432.0019%Al's Appliances$475.0016% a.Bob's Nuts and Boltsb.Steve's Scratch and Dentc.Wally's Washing Machinesd.Al's Appliances

Describe the effect an increase in i, the interest rate applied to the present value, has on the monthly payment P in the formula a. An increase in i, the interest rate, will not change P, the monthly payment. b. An increase in i, the interest rate, will create an increase in P, the monthly payment. c. An increase in i, the interest rate, will create a decrease in P, the monthly payment. d. An increase in i, the interest rate, can increase or decrease P, the monthly payment, depending on the value of PV. Please select the best answer from the choices provided

Listed below are the balances and annual percentage rates for Jimmy's credit cards. If Jimmy makes the same payment each month to pay off his entire credit card debt in the next 12 months, how much will he have paid in interest in the 12 month period?(Hint, find out how much interest Jimmy pays to each card over the 12 months seperately, and then add them together.) Credit Card Current Balance APR A $563.00 16% B $2,525.00 21% C $972.00 19% a. $321.83 b. $370.75 c. $449.24 d. $730.80 Please select the best answer from the choices provided

Which of the following is not a disadvantage to cash advances on a credit card?a.Cash advances are similar to loans in that they need to be paid back with interest.b.Cash advances require a lot of paperwork and are generally difficult to get.c.Cash advances are often the last thing to be paid when paying off your credit card.d.Cash advances often come with an interest rate much higher than your credit card.