Paying Off Debt Answers

Which of the following types of credits would best describe credit cards?a.closed and securedb.closed and unsecuredc.open and securedd.open and unsecured

Robert is looking to buy a deep fryer. He has narrowed his search down to two models. The following table gives the details of the prices, cost per use in electricity and oil, and lifespan of the two models Robert is considering to purchase. Brand Brand P Brand Q Price $144.00 $37.50 Avg. Cost/Use $0.49 $0.75 Lifespan 6 years 2 years Robert plans on using his deep fryer about eight times per month. After six years, which brand will have the lower lifetime cost, and by how much? Hint: Assume that either deep fryer can be repurchased at the same price, if needed to provide the desired length of service. a. Brand P will be $118.26 cheaper than Brand Q. b. Brand P will be $149.76 cheaper than Brand Q. c. Brand Q will be $184.50 cheaper than Brand P. d. Brand Q will be $31.50 cheaper than Brand P. Please select the best answer from the choices provided

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

Yvonne's credit card has an APR of 17.79% and a 30-day billing cycle. The following table details her credit card transactions in the month of June.DateAmount ($)Transaction6/1925.43Beginning balance6/762.74Payment6/1128.27Purchase6/2150.00PurchaseBetween the previous balance method and the daily balance method, which method of calculating Yvonne's June finance charge will result in a greater finance charge, and how much greater will it be?a.The daily balance method will have a finance charge $0.21 greater than the previous balance method.b.The daily balance method will have a finance charge $0.53 greater than the previous balance method.c.The previous balance method will have a finance charge $0.45 greater than the daily balance method.d.The previous balance method will have a finance charge $0.40 greater than the daily balance method.

Which of the following types of credits would best describe credit cards?a.closed and securedb.closed and unsecuredc.open and securedd.open and unsecured

You are considering buying one of two brands of barbecue grills. Brand F costs $650 and will last for about fifteen years. Brand G costs $200 and will last for about five years, so you will need to buy three of them over the years to equal one Brand F grill. In either case, you plan to pay for the grill with your credit card, which has an interest rate of 13.01%, compounded monthly. You will pay off a Brand F grill in five years of monthly payments, and you will pay off a Brand G grill in three years of monthly payments. Assuming that you have no other purchases on your credit card, over a fifteen-year period, which kind of grill will be cheaper, and how much cheaper will it be? (Round all dollar values to the nearest cent.)a.Brand G will end up costing $159.48 less than Brand F.b.Brand G will end up costing $50.00 less than Brand F.c.Brand F will end up costing $134.28 less than Brand G.d.Brand F will end up costing $91.08 less than Brand G.

Fran is going to transfer her credit card balance over to a new card. She has an existing balance of $752.69. Her current card charges her a transfer fee of 12.5%, added to her balance, for transferring her debt. The new card has an opening fee of $50, which is also added to her balance. She will also have to make an immediate minimum payment, which is 3.35% of her total balance. How much will her balance be after she makes this payment, assuming that she pays the minimum amount? Round all dollar values to the nearest cent.a.$866.74b.$868.40c.$818.41d.$926.82

From the statements below, identify the way or ways in which making only minimum monthly payments on a long-term credit purchase can be a disadvantage.I. It is illegal to make only the minimum payments for more than one year.II. Repeatedly making minimum payments harms your credit score.III. The total cost is higher if the length of the debt is longer.a.I and IIb.II onlyc.I and IIId.II and III

Ellen purchased a dishwasher, which cost $315 before the 9.22% sales tax. She used the machine an average of 10 times per week for the next six years, at which point she replaced it. Each time she ran the dishwasher it cost her $0.09 for water and $0.13 for electricity. What was the lifetime cost of Ellen's dishwasher?a.$1,030.44b.$686.40c.$1,093.73d.$749.69

From the statements below, identify the way or ways in which making only minimum monthly payments on a long-term credit purchase can be a disadvantage.I. It is illegal to make only the minimum payments for more than one year.II. Repeatedly making minimum payments harms your credit score.III. The total cost is higher if the length of the debt is longer.a.I and IIb.II onlyc.I and IIId.II and III

Eric is comparing the credit scores of his friends. The scores he gathered are found in the table below. 588838691818846725605732750Among this batch of credit scores, find whether the mean or the median is higher, and how much higher it is. (Round to the nearest whole point, if applicable.)a.The mean is 113 points higher than the median.b.The mean is 1 point higher than the median.c.The median is 15 points higher than the mean.d.The median is 8 points higher than the mean.

Fran is going to transfer her credit card balance over to a new card. She has an existing balance of $752.69. Her current card charges her a transfer fee of 12.5%, added to her balance, for transferring her debt. The new card has an opening fee of $50, which is also added to her balance. She will also have to make an immediate minimum payment, which is 3.35% of her total balance. How much will her balance be after she makes this payment, assuming that she pays the minimum amount? Round all dollar values to the nearest cent.a.$866.74b.$868.40c.$818.41d.$926.82

Of the following, which statement or statements accurately reflect a way in which credit can be safer than cash?I. If your credit card gets stolen, you can cancel it and get your money back.II. It is harder to lose a single credit card than a large number of bills.III. If a merchant does not honor the agreement, you can call the credit company and dispute the charges.a.I and IIIb.II onlyc.III onlyd.I, II, and III

Of the following statements, which one or ones describe actions harmful to your credit score?I. Owing a lot of moneyII. Having many lines of creditIII. Making steady paymentsa.I and IIb.II onlyc.I and IIId.I only

What is the prime rate?a.The prime rate is the best interest rate that banks offer their most creditworthy customers.b.The prime rate is the interest rate on a credit card, unadjusted for interval compounding.c.The prime rate is the number which indicates your credit history.d.The prime rate is the highest interest rate allowed by law.

Pam has just moved into a new home and wants to purchase an oven. She expects to live in this house for the foreseeable future. She has narrowed her choices down to two options. Consider the following table, which describes the prices, daily electricity costs, and lifespans of the two ovens she is considering: Brand Brand U Brand V Price $2,250 $725 Avg. Cost/Day $0.16 $0.28 Lifespan 24 years 8 years Which brand will have the lower lifetime cost, and how much lower will it be? Hints: If the product's expected lifespans differ, assume that repurchase(s) at the same price is possible to equalize the lifespans. Remember that six of the twenty-four years will be leap years, and round all dollar values to the nearest cent. a. Brand U will be $1,051.92 cheaper than Brand V. b. Brand U will be $976.92 cheaper than Brand V. c. Brand V will be $75 cheaper than Brand U. d. Brand V will be $2109.40 cheaper than Brand U. Please select the best answer from the choices provided

Adam’s credit card calculates finance charges using the adjusted balance method and a 30-day billing cycle. The table below shows his use of that credit card over three months.DateAmount ($)Transaction4/1626.45Beginning balance4/1037.41Purchase4/1244.50Purchase5/365.50Payment5/1624.89Purchase5/20104.77Payment6/623.60Payment6/1015.00Purchase6/1451.85PurchaseIf Adam’s credit card has an APR of 14.63%, what is Adam’s balance at the end of June?a.$629.42b.$629.66c.$627.27d.$628.40

Seth has just decided to replace his computer. His old computer cost him $1,433 when he bought it exactly seven years ago. Seth paid for it with his credit card, which has an APR of 11.70%, compounded monthly. He made no other purchases with the card and paid off his balance after two and a half years of making identical monthly payments. The computer consumed about $0.79 of electricity every day. In total, what percentage of the lifetime cost of the computer did the electricity make up? (Assume that two out of the seven years were leap years, and round all dollar values to the nearest cent.)a.82.157%b.58.500%c.21.718%d.54.898%

Pam has just moved into a new home and wants to purchase an oven. She expects to live in this house for the foreseeable future. She has narrowed her choices down to two options. Consider the following table, which describes the prices, daily electricity costs, and lifespans of the two ovens she is considering: Brand Brand U Brand V Price $2,250 $725 Avg. Cost/Day $0.16 $0.28 Lifespan 24 years 8 years Which brand will have the lower lifetime cost, and how much lower will it be? Hints: If the product's expected lifespans differ, assume that repurchase(s) at the same price is possible to equalize the lifespans. Remember that six of the twenty-four years will be leap years, and round all dollar values to the nearest cent. a. Brand U will be $1,051.92 cheaper than Brand V. b. Brand U will be $976.92 cheaper than Brand V. c. Brand V will be $75 cheaper than Brand U. d. Brand V will be $2109.40 cheaper than Brand U. Please select the best answer from the choices provided

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

Dennis has a credit card with an APR of 10.14% and a billing cycle of 30 days. The following table shows his transactions with that credit card in the month of November.DateAmount ($)Transaction11/1517.87Beginning balance11/931.63Purchase11/2364.10Purchase11/2665.75PaymentIf the finance charge for November is $3.82, which method of calculating the finance charge does Dennis’s credit card company use?a.adjusted balance methodb.previous balance methodc.daily balance methodd.there is not enough information to determine which method was used

Marilyn has two credit cards, D and E. Card D has a balance of $691.64, and Card E has a balance of $1,014.22. The minimum monthly payment on Card D is 3.57% of the total balance, and the minimum monthly payment on Card E is 2.51% of the total balance. How much greater is the minimum payment on Card E than on Card D?a.$18.85b.$8.10c.$11.24d.$0.77

Miles and Nick each separately apply for and receive loans worth $5,000 apiece. Miles has a very good credit score, so his loan has an APR of 7.75%, compounded monthly. Nick’s credit score is rather low, so his loan has an APR of 13.10% interest, compounded monthly. If both of them repay their loans over a four year period, making equal monthly payments based on their own loan, how much more will Nick have paid than Miles? (Round all dollar values to the nearest cent.) a. $619.68 b. $267.50 c. $1,609.57 d. $1,070.00 Please select the best answer from the choices provided

Marilyn has two credit cards, D and E. Card D has a balance of $691.64, and Card E has a balance of $1,014.22. The minimum monthly payment on Card D is 3.57% of the total balance, and the minimum monthly payment on Card E is 2.51% of the total balance. How much greater is the minimum payment on Card E than on Card D?a.$18.85b.$8.10c.$11.24d.$0.77

Rachel has developed a plan to start paying off her credit card debt, and has stopped making purchases with her credit card. She has a credit card balance of $1,120.87. Her card has an APR of 14.12%, compounded monthly, and has a minimum monthly payment of 3.15% of the total balance, which is calculated after the monthly interest. Rachel has decided to pay off her debt by making identical monthly payments over a period of two years. If she starts this month, how much greater will her first payment be than the minimum payment required? (Round final answer to the nearest dollar.) a. $17 b. $14 c. $19 d. $11 Please select the best answer from the choices provided

You are looking for your first credit card. You plan to use this credit card only for emergencies and to pay the credit card balance in full each month. Which credit card feature is most important? a. No annual fee b. Low APR c. Generous rewards program d. No balance transfer fee Please select the best answer from the choices provided

Which answer choice does not name one of the three national credit reporting agencies (also called credit bureaus)?a.Equifaxb.Experianc.TransAtlanticd.TransUnion

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Nicole used her credit card to buy a $1,255 mattress. Her credit card has an APR of 11.56%, compounded monthly, and the mattress was the only purchase on the card. Nicole paid off the mattress after two and a half years. If the sales tax in Nicole’s area is 9.08%, how much interest did Nicole pay in total? (Round all dollar values to the nearest cent.)a.$213.85b.$456.20c.$196.10d.$327.86

Of the following, which statement or statements accurately represent possible effects of a long-term credit purchase on your credit score?I. Showing a willingness to pay high interest rates increases your score.II. Making only minimum payments for an extended time can hurt your score.III. Regularly paying off a credit balance can boost your score.a.I and IIIb.II onlyc.II and IIId.I, II, and III

To minimize finance charges calculated by the daily balance method, when in the billing cycle is it best to make purchases and payments?a.Both purchases and payments should be made early in the billing cycle.b.Both purchases and payments should be made late in the billing cycle.c.Payments should be made early in the billing cycle, and purchases should be made late in the billing cycle.d.Purchases should be made early in the billing cycle, and payments should be made late in the billing cycle.

Jenny used her credit card to buy a refrigerator with a base cost of $824. The refrigerator consumed an average of $0.09 in electricity every day. Jenny made regular monthly payments for three and a half years, at which point the refrigerator was paid off. Over the eight years that Jenny had the refrigerator, it needed repairs three times, costing $68.75 each time. If Jenny’s credit card has an APR of 10.54%, compounded monthly, and sales tax in Jenny’s area is 7.13%, what was the lifetime cost of Jenny’s refrigerator? Assume that Jenny made no other purchases with her credit card, and round all dollar values to the nearest cent. (Remember that leap year occurs every four years.)a.$1,528.47b.$1,622.46c.$1,779.63d.$1,457.91

Which of the following is not a disadvantage of using credit instead of cash?a.Credit cards increase the likelihood of impulse buying.b.Credit cards can be used to increase your credit score.c.Credit cards generally come with interest and other fees that cash does not.d.Credit cards require a good credit rating and responsible credit maintenance.

What is the name of the legally mandated area on every credit solicitation which provides information about the terms and conditions of the card?a.Schroeder Boxb.Schumer Boxc.Disclosure Boxd.Disclaimer Box

Calvin’s credit card computes finance charges using the daily balance method. His card has a billing cycle of 30 days and an APR of 14.75%. The following table details Calvin’s transactions in the month of September.DateAmount ($)Transaction9/1716.54Beginning balance9/784.94Purchase9/1215.69Purchase9/20200.00PaymentWhat will Calvin’s starting balance be next month?a.$617.17b.$624.74c.$625.91d.$623.52

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

Paul is going to buy a collectible vintage painting from a local art gallery. The painting is priced at $600 in the gallery. The gallery owner does accept credit cards but prefers cash. In fact, he offers to give Paul a 5% discount if he can pay in cash. Paul doesn't have any cash but can get a cash advance on his credit card. His credit card has an APR of 16% on credit purchases and a 32% APR on cash advances. Assuming Paul wants to pay the painting off over 12 months, which of the following is true? a. Paul will pay a total of $696, over 12 months, if he purchases the painting with his credit card. b. Paul will pay a total of $653.28, over 12 months, if he purchases the painting with his credit card. c. Paul will pay a total of $782.40, over 12 months, if he purchases the painting with a cash advance for discounted purchase price. d. Paul will pay a total of $708.96, over 12 months, if he purchases the painting with a cash advance for discounted purchase price. Please select the best answer from the choices provided.

Of the following statements, which one or ones indicate possible effects of a low credit score?I. You will have a difficult time qualifying for loans.II. Any loans you take out will be relatively short-term.III. You will have to pay higher than average interest rates.a.I onlyb.I and IIc.III onlyd.I and III

Christine is reviewing her credit scores from the three major credit bureaus. Her Experian score is 775, her Equifax score is 721, and her TransUnion score is 760. What is Christine’s median credit score? (Round to the nearest whole point, if applicable.)a.752b.721c.760d.748

Andrew is on a 30-day billing cycle. His credit card has an APR of 16.60% and computes finance charges using the previous balance method. The table below shows transactions that Andrew made in March. Based on the information in the table, what will Andrew’s March finance charge be?DateAmount ($)Transaction3/11,794.30Beginning balance3/6440.15Purchase3/935.65Purchase3/22250.00Payment3/2551.71Purchasea.$46.07b.$28.66c.$21.36d.$24.82

Darryl just received his credit scores from the three major credit bureaus. His Experian score is 719, his Equifax score is 741, and his TransUnion score is 780. What is his mean credit score? (Round to the nearest whole point, if applicable.)a.719b.741c.760d.747

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

Laura’s credit card has an APR of 12.04%, and it computes finance charges using the daily balance method and a 30-day billing cycle. On June 1st, Laura had a balance of $606.40. She made exactly one transaction in June: a payment of $55.25. If Laura’s finance charge for June was $5.71, on which day did she make the payment?a.June 8thb.June 12thc.June 15thd.June 20th

Robert is looking to buy a deep fryer. He has narrowed his search down to two models. The following table gives the details of the prices, cost per use in electricity and oil, and lifespan of the two models Robert is considering to purchase. Brand Brand P Brand Q Price $144.00 $37.50 Avg. Cost/Use $0.49 $0.75 Lifespan 6 years 2 years Robert plans on using his deep fryer about eight times per month. After six years, which brand will have the lower lifetime cost, and by how much? Hint: Assume that either deep fryer can be repurchased at the same price, if needed to provide the desired length of service. a. Brand P will be $118.26 cheaper than Brand Q. b. Brand P will be $149.76 cheaper than Brand Q. c. Brand Q will be $184.50 cheaper than Brand P. d. Brand Q will be $31.50 cheaper than Brand P. Please select the best answer from the choices provided

Which of the following is not a kind of consumer credit?a.installment creditb.personal loansc.service creditd.marginal credit

Natasha had a $922.93 balance on her credit card at the beginning of September. Her credit card has an APR of 9.89%, compounded monthly, and a minimum monthly payment of 3.08% of the total balance. The following table shows Natasha’s credit card purchases over the next two months. Month Cost ($) September 33.70 October 61.70 October 27.80 If Natasha makes only the minimum payments, what will her balance at the beginning of November? (Assume that the interest accrues before the monthly payment, and that the monthly payment occurs at the end of the month. Round all dollar values to the nearest cent.) a. $1,180.48 b. $1,064.55 c. $1,000.93 d. $1,123.97 Please select the best answer from the choices provided

Who can access your credit report?a.friendsb.employersc.neighborsd.teachers

Use the following compound interest formula to complete the problem. Victor has a credit card with an APR of 13.66%, compounded monthly. He currently owes a balance of $1,349.34. Assuming that Victor makes no purchases or payments, how much will he owe after one year, to the nearest cent? a. $1,349.34 b. $1,533.66 c. $1,545.65 d. $1,364.70 Please select the best answer from the choices provided

How is the daily balance method different from compounding interest daily?a.Unlike daily compound interest, the daily balance method only applies charges at the end of the month.b.The daily balance method rounds less frequently than daily compound interest.c.The daily balance method checks your balance at the end of each day, but daily compound interest checks at the beginning of each day.d.It is not different. The two processes are the same.

Which of the following is not a disadvantage of using cash instead of credit?a.Using cash will not help you improve your credit rating.b.Using cash can be awkward when making large purchases.c.Using cash generally requires trips to the bank or ATM to keep cash on hand.d.Using cash can make it easier to over-spend since you know exactly how much you have.

Paul paid $663 for a new freezer. He paid for the freezer with his credit card, which has an interest rate of 15.28% compounded monthly, and made monthly payments for five years until the freezer was paid off. He kept the freezer for seven years, and it used an average of $2.14 of electricity per week. Paul made no other purchases or payments with his credit card until the freezer was paid off. Between the interest and the electricity, which component of the lifetime cost of the freezer was greater, and how much greater was it? (Round all dollar values to the nearest cent.)a.The interest cost $106.60 more than the electricity.b.The interest cost $173.24 more than the electricity.c.The electricity cost $489.76 more than the interest.d.The electricity cost $115.96 more than the interest.

Use the following compound interest formula to complete the problem. Currently you have two credit cards, H and I. Card H has a balance of $1,186.44 and an interest rate of 14.74%, compounded annually. Card I has a balance of $1,522.16 and an interest rate of 12.05%, compounded monthly. Assuming that you make no purchases and no payments with either card, after three years, which card’s balance will have increased by more, and how much greater will that increase be? a. Card I’s balance increased by $53.16 more than Card H’s balance. b. Card I’s balance increased by $13.45 more than Card H’s balance. c. Card H’s balance increased by $35.61 more than Card I’s balance. d. Card H’s balance increased by $49.06 more than Card I’s balance. Please select the best answer from the choices provided

Hal is going over the credit scores he received from the three major credit bureaus. He Experian score is 711, his Equifax score is 736, and his TransUnion score is 736. What is the mode of Hal’s credit scores? (Round to the nearest whole point, if applicable.)a.736b.728c.723d.There is no mode in this group.

You are considering making a major purchase on your credit card. You should ask yourself the following questions, except which answer choice?a.Would it cost me less if I came up with a different purchasing plan? b.What else can I purchase to reach my full credit limit?c.Will I receive any incentives from my credit card company for making this purchase?d.How much will my purchase really end up costing if I don’t pay off the balance immediately?

Jordan’s credit card has an APR of 10.59%, compounded monthly. He is required to make a minimum payment of 3.96% of his current balance every month. At the beginning of March, Jordan had a balance of $628.16 on his credit card. The following table shows his credit card purchases over the next few months.MonthCost ($)March50.81March48.04April77.36April32.40April49.20May25.79May79.39May79.08If Jordan makes only the minimum monthly payments in March, April, and May, what will his balance be after he makes the minimum payment for May? (Assume that interest is compounded before the monthly payment is made, and that the monthly payment is applied at the end of the month. Round all dollar values to the nearest cent.)a.$1,094.10b.$988.97c.$967.60d.$1,070.23

Which method of calculating finance charge results in the lowest finance charge?a.average daily balanceb.previous balancec.ending balanced.adjusted balance

Carlos bought a $235 water heater with his credit card. He used the water heater for five years before replacing it. He paid off the water heater after two years, making monthly payments. The water heater cost him an average of $1.56 per week in electricity, and $0.78 per week in water. If Carlos’s credit card has an APR of 14.15%, compounded monthly, and he made no other purchases with it, what percentage of the lifetime cost of the water heater was interest? (Round all dollar values to the nearest cent.)a.14.15%b.13.35%c.4.12%d.30.83%

Ellen purchased a dishwasher, which cost $315 before the 9.22% sales tax. She used the machine an average of 10 times per week for the next six years, at which point she replaced it. Each time she ran the dishwasher it cost her $0.09 for water and $0.13 for electricity. What was the lifetime cost of Ellen's dishwasher?a.$1,030.44b.$686.40c.$1,093.73d.$749.69

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.

Xavier is comparing the credit scores of people in his neighborhood. He compiled the scores he found into the table below. What is the median credit score in this group? (Round to the nearest whole point, if applicable.)763680776639845825776690829a.776b.758c.845d.737

What is the name of the legally mandated area on every credit solicitation which provides information about the terms and conditions of the card?a.Schroeder Boxb.Schumer Boxc.Disclosure Boxd.Disclaimer Box

Olivia bought a $1,874 sprinkler system with her credit card. Her credit card has an APR of 10.31%, compounded monthly. She made no other purchases on the card until the sprinkler system was fully paid for, which took four years of identical monthly payments. Over the eight years that Olivia kept the sprinkler system, it used an average of $2.11 in water per week. After eight years, what percentage of the total lifetime cost of the system did the original price make up? (Round all dollar values to the nearest cent.)a.81.66%b.59.07%c.38.25%d.72.33%

Brian bought a new air conditioning unit on his credit card. The unit had a base price of $435. Brian made no other purchases on his credit card. Brian’s credit card has an interest rate of 9.4%, compounded monthly, and Brian paid off the balance by making monthly payments for a year and a half. If the sales tax in Brian’s area is 8.51%, how much did Brian pay in total? (Round all dollar values to the nearest cent.) a. $472.02 b. $468.00 c. $496.32 d. $507.96 Please select the best answer from the choices provided

Jeff has a balance of $2,513.77 on his credit card. He would like to pay off his card over the course of a year and a half by making identical monthly payments. The APR on his card is 10.66%, compounded monthly. Assuming that Jeff makes no additional purchases with his card, how much will he have to pay every month to reach his goal? (Round all dollar values to the nearest cent.)a.$151.73b.$162.57c.$139.65d.$147.64

You are a loan officer trying to decide which clients deserve your best rates. The table below shows the credit scores of several loan applicants.NameExperianEquifaxTransUnionKellin720783733Natasha699684784Edward789658782Lisa810679792Based on each applicant’s median credit score, who deserves your best interest rates?a.Kellinb.Natashac.Edwardd.Lisa

Patrick has a credit card with an APR of 15.40% and a billing cycle of 30 days. The following table shows Patrick’s credit card transactions in the month of August.DateAmount ($)Transaction8/11,466.22Beginning balance8/628.48Purchase8/9150.00Payment8/17115.75Payment8/2040.00Purchase8/2231.76PurchaseHow much greater will Patrick’s August finance charge be if his credit card company computes finance charges using the previous balance method than if it computes finance charges using the adjusted balance method?a.$2.44b.$3.41c.$2.13d.$4.69

What is an open line of credit?a.A line of credit which has no current balance.b.A line of credit with a variable interest rate.c.A line of credit against which additional debt may be drawn.d.A line of credit which has no credit history requirements.

Abby has a credit card which uses the adjusted balance method to compute finance charges. Her card has an APR of 11.83%, and she is on a 30-day billing cycle. The table below shows her transactions in the month of January.DateAmount ($)Transaction1/1722.10Beginning balance1/618.12Purchase1/765.00Payment1/1418.00Purchase1/2044.79Purchase1/2334.25Purchase1/2740.00PaymentWhat will Abby’s January finance charge be?a.$6.08b.$7.12c.$7.22d.$8.25

Sophie did an anyonymous survey and collected her friends’ credit scores. The scores she found are listed in the table below. What is the mean credit score in this group? (Round to the nearest whole point, if applicable.)682601744674701790676638773a.698b.695c.676d.701

You are looking for your first credit card. You plan to use this credit card only for emergencies and to pay the credit card balance in full each month. Which credit card feature is most important? a. No annual fee b. Low APR c. Generous rewards program d. No balance transfer fee 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

Nicole used her credit card to buy a $1,255 mattress. Her credit card has an APR of 11.56%, compounded monthly, and the mattress was the only purchase on the card. Nicole paid off the mattress after two and a half years. If the sales tax in Nicole’s area is 9.08%, how much interest did Nicole pay in total? (Round all dollar values to the nearest cent.)a.$213.85b.$456.20c.$196.10d.$327.86

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

Yolanda’s credit card has an APR of 16.22% and a billing cycle of 30 days. The table below shows her transactions with that credit card in the month of November.DateAmount ($)Transaction11/1857.14Beginning balance11/376.95Purchase11/1050.00Payment11/2443.19PurchaseFind Yolanda’s finance charge in November using the previous balance method, the adjusted balance method, and the daily balance method. Among those three possible finance charges, what is the value of the one which is neither lowest nor highest?a.$12.53b.$11.59c.$12.05d.$10.91

What is the difference between a credit score and a credit rating?a.A credit score and a credit rating are the same thing.b.A credit score is a measure of how much debt you have, and a credit rating is a measure of your creditworthiness.c.A credit score is a number indicating your creditworthiness, and a credit rating is a measurement of how your credit score compares to others.d.A credit score is a measurement of your creditworthiness from one major credit bureau, and a credit rating is a measurement of your creditworthiness from all three major credit bureaus.

Use the following compound interest formula to complete the problem. Currently you have two credit cards, H and I. Card H has a balance of $1,186.44 and an interest rate of 14.74%, compounded annually. Card I has a balance of $1,522.16 and an interest rate of 12.05%, compounded monthly. Assuming that you make no purchases and no payments with either card, after three years, which card’s balance will have increased by more, and how much greater will that increase be? a. Card I’s balance increased by $53.16 more than Card H’s balance. b. Card I’s balance increased by $13.45 more than Card H’s balance. c. Card H’s balance increased by $35.61 more than Card I’s balance. d. Card H’s balance increased by $49.06 more than Card I’s balance. Please select the best answer from the choices provided

What is a secure line of credit?a.A line of credit offered only to individuals with excellent credit ratings.b.A line of credit offered to a business or corporation.c.A line of credit backed by the government.d.A line of credit backed by collateral.

Jessica’s credit card is on a 30-day billing cycle, and it computes finance charges using the adjusted balance method. The following table details Jessica’s use of her credit card in the month of October.DateAmount ($)Transaction10/11,240.55Beginning balance10/236.43Purchase10/1075.00Payment10/13131.79Payment10/2041.52Purchase10/2225.00PurchaseWhat is Jessica’s adjusted balance for October?a.$1,136.71b.$1,033.76c.$1,140.55d.$1,240.55

Ruth’s credit card has an APR of 10.91%, and it computes finance charges using the previous balance method on a 30-day billing cycle. During the April billing cycle, she made a $45.17 payment on April 10th and a $88.34 purchase on April 17th. Her total at the start of May was $847.64. What was her balance at the beginning of April? a. $890.91 b. $797.16 c. $796.87 d. $804.47 Please select the best answer from the choices provided

Tom has offered to sell Julian his motorcycle for $1,200. Julian knows this is a very good deal, since the same motorcycle can be purchased at the dealership for $1,800. Since Julian doesn’t have $1,200 and Tom does not accept credit cards, they both think a cash advance might be a good idea. Julian’s credit card company can offer him a cash advance for the $1,200 he needs at an interest rate of 26%. He would then pay off the balance in 24 months. Should Julian use the cash advance to purchase the motorcycle? a. No. Julian would be paying too much in interest to warrant using a cash advance. b. Yes. Even with the interest, the total cost of the motorcycle would be less than at the dealership. c. Yes. The interest rate on the cash advance is low. Julian will not have to pay much interest on the cash advance. d. No. The high interest rate on the cash advance would make the purchase of the motorcycle almost twice than the price at the dealership. Please select the best answer from the choices provided

Tim has four credit cards with the balances and APRs listed in the chart below. What will Tim's total monthly minimum credit card payment need to be to pay off all four credit cards in 24 months?Credit CardBalanceAPRA$1,260.0012%B$900.0018%C$1,290.009%D$1,200.0016% a.$118.24b.$162.62c.$163.00d.$221.93

Kevin is looking at two brands of washing machines. Between water and electricity, a Brand C washer uses about $0.65 per load, and a Brand D washer uses about $0.27 per load. Kevin averages about five loads of laundry per month. After one year, how much more would the utility costs for a Brand C washer be than the utility costs for a Brand D washer?a.$22.80b.$16.20c.$7.60d.$19.00

Which of these is not a method used to calculate finance charges? a. adjusted balance b. average daily balance c. usual balance d. previous balance Please select the best answer from the choices provided.

Gregory has a credit card with a 30-day billing cycle and an APR of 11.95%. The following table shows Gregory’s credit card transactions for the month of April.DateAmount ($)Transaction4/1622.82Beginning balance4/445.45Payment4/1078.91Purchase4/2516.36PurchaseBetween the adjusted balance method and the daily balance method, which method of computing Gregory’s April finance charge will result in a greater finance charge, and how much greater will it be?a.The daily balance method will have a finance charge $0.09 greater than the adjusted balance method.b.The daily balance method will have a finance charge $0.54 greater than the adjusted balance method.c.The adjusted balance method will have a finance charge $1.40 greater than the daily balance method.d.The adjusted balance method will have a finance charge $0.86 greater than the daily balance method.

Ralph is purchasing a new gaming system for $300.00. He is trying to decide whether he wants to use cash or his credit card to pay. He has $600.00 available in his checking account. Which of the following is not an argument that justifies Ralph's use of his cash to purchase the gaming system?a.Using cash can help Ralph improve his credit score.b.Using cash may limit overspending or impulse buying.c.Cash doesn't come with any potential "over limit" or "late payment" fees.d.Cash will be the easiest method of payment with very few security measures involved.

You are considering making a major purchase on your credit card. You should ask yourself the following questions, except which answer choice?a.Would it cost me less if I came up with a different purchasing plan? b.What else can I purchase to reach my full credit limit?c.Will I receive any incentives from my credit card company for making this purchase?d.How much will my purchase really end up costing if I don’t pay off the balance immediately?

Which of the following is not a benefit to using credit instead of cash? a. Using credit can help you build a good credit rating. b. Using credit allows you to make impulsive buys. c. Using credit makes it easier to track your spending than cash. d. Using credit offers a convenient source of funds in an emergency. Please select the best answer from the choices provided

Jeff has a balance of $2,513.77 on his credit card. He would like to pay off his card over the course of a year and a half by making identical monthly payments. The APR on his card is 10.66%, compounded monthly. Assuming that Jeff makes no additional purchases with his card, how much will he have to pay every month to reach his goal? (Round all dollar values to the nearest cent.)a.$151.73b.$162.57c.$139.65d.$147.64

Darryl’s credit card has a minimum monthly payment of 2.51% of the card’s balance. If Darryl currently owes $1,431.72, what is his minimum payment, to the nearest cent?a.$29.95b.$33.67c.$2.99d.$35.94

Tony is a loan officer. He determines his clients’ eligibility for loans and for good interest rates by using their credit scores. The scores of several clients are shown in the following table.NameExperianEquifaxTransUnionNeil726752822Paula634732771Jeff721760754Peter666716707Help Tony evaluate his applicants based on their mean and median credit scores.a.Jeff has the highest mean score, but Paula has the highest median score.b.Neil has the highest mean score, but Jeff has the highest median score.c.Neil has the highest mean score and the highest median score.d.Paula has the highest mean score, but Jeff has the highest median score.

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