The Cost of Credit Answers

Sienna has a car loan with an annual interest rate of 4.8%. She will make the same monthly payment for 48 months, after which the loan will be paid back. Diego says that Sienna’s loan is an example of closed-end credit while Sienna says it is an example of open-end credit. Which statement about the loan is true?

Kanya has a credit card that gives a 6% discount on every purchase and free shipping when used online. The annual percentage rate on the credit card is 12%. Kanya wants to buy a laptop that costs $420. Which statement about the cost of the laptop is true?

The table shows a schedule of Evita’s payment plan for a used car. Evita’s Payment Plan for the First Three YearsYearBalanceMonthly PaymentEnd of YearBalance1 $356.82 2 $356.82 3 $356.82$8,563.39Evita paid $2,408.91 in interest. What was the selling price of the car?

Which is an example of easy-access credit?

Maura had to get a $350 emergency loan at a very high interest rate to pay for dental work. The lender did not need her credit history. If she does not pay back the loan within three weeks, she will have to pay an extra $50. Raina says the loan is an example of easy-access credit while Maura says it is an example of open-end credit. Which statement about the loan is correct?

The table shows a schedule of Jorge’s payment plan for a car. Jorge’s Payment PlanYearBalanceMonthly PaymentEnd of YearBalance1$15,469.80$257.83 2 $257.83 3 $257.83 4 $257.83 5 $257.83 6 $257.83 How many years will it take Jorge to pay off the loan?

Tran has a credit card with a spending limit of $2000 and an APR (annual percentage rate) of 12%. During the first month, Tran charged $450 and paid $150 of that in his billing cycle. Which expression will find the amount of interest Tran will be charged after the first month?

The table shows a schedule of Mr. Kirov’s plan for paying off his credit card balance.Mr. Kirov’s Payment Plan BalancePaymentNew Balance RateInterest$800.00$100$700.000.012$8.40$708.40$100$608.400.012$7.30$615.70$100$515.700.012$6.19If Mr. Kirov continues to make monthly payments of $100 and does not make any new purchases, how many more payments will he need to make before the balance is 0?

What is easy-access credit?

Which is an example of closed-end credit?