1
QuizMultiple Choice

The Cost of Credit

Question 1 • Personal Finance - EL3403

Aria has a credit card that gives a 5% discount on every purchase and free shipping when used online. The annual percentage rate on the credit card is 18%. Aria wants to buy a doghouse that costs $580. Which statement about the cost of the doghouse is true?

Answer
A
If Aria uses the credit card and pays the full balance during the billing cycle, she will spend $2.42 less than paying cash for the doghouse.
B
If Aria uses the credit card and pays the full balance during the billing cycle, she will spend $8.70 less than paying cash for the doghouse.
C
If Aria uses the credit card and pays the full balance during the billing cycle, she will spend $29.00 less than paying cash for the doghouse.
D
If Aria uses the credit card and pays the full balance during the billing cycle, she will spend $104.04 less than paying cash for the doghouse.
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