3
QuizMultiple Select

The Cost of Credit

Question 3 • Personal Finance - EL3403

Mo has a credit card that gives a 3% discount on every purchase. The annual percentage rate on the card is 12%. He is purchasing an electronic reader for $140. Check all that apply.

Answer
A
If Mo uses the credit card and pays the full balance during the billing cycle, the cost of the purchase will be $140.
B
If Mo pays cash, the cost of the purchase will be $140.
C
If Mo uses the credit card and pays off the balance at $30 a month for 7 months with no late fees, the cost of the purchase will be $143.34.
D
If Mo pays cash, the cost of the purchase will be $135.80.
E
If Mo uses the credit card and pays off the balance at $20 a month for 7 months with no late fees, the cost of the purchase will be $139.89.
F
If Mo uses the credit card and pays the full balance during the billing cycle, the cost of the purchase will be $135.80.
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