AnswersPersonal FinanceFinancial Responsibility and Budgeting — TestQuestion 17
17
QuizMultiple Choice

Financial Responsibility and Budgeting — Test

Question 17 • Personal Finance

Veronique and Lily each bought a piece of luggage that had the same price in different stores. The given table shows how they will pay for the item. Payment for Purchases Name Payment Type Payment Amount (Including Finance Charges) Number of Months to Pay for Item Veronique Store financed $25 10 Lily Credit card $35 7 Who made the better financial decision and why?

Answer
A
Veronique because her payments are lower.
B
Lily because her final cost, including finance charges, is less than Veronique’s.
C
Veronique because her final cost, including finance charges, is less than Lily’s.
D
Lily because she is paying off her purchase sooner.

Explanation

Multiply each payment by the number of months to find the total cost. Veronique pays $25 × 10 = $250, while Lily pays $35 × 7 = $245. Lily’s final cost, including finance charges, is $5 less, so she made the better financial decision.

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