Topic Test Answers

How can credit cards be safer than cash?a.It is harder to lose a single credit card than a large number of bills.b.A credit card requires a signature, so it is impossible for anyone other than you to use.c.If a merchant does not hold up their end of an agreement, you can call the credit company and dispute the charges.d.Cash can be miscounted, but credit cards cannot.

Roger has a credit card with an APR of 19.40% and a billing cycle of 30 days. The following table shows his transactions with that credit card in the month of June.DateAmount ($)Transaction6/1265.40Beginning balance6/690.00Payment6/1643.33Purchase6/2237.71PurchaseIf Roger’s finance charge for June is $3.56, which method of calculating the finance charge does Roger’s credit card company use?a.daily balance methodb.adjusted balance methodc.previous balance methodd.there is not enough information to determine which method was used

Gary has a credit card with an APR of 13.57%, compounded monthly. He would like to pay off the $1,847.42 card balance over the course of two and a half years by making identical monthly payments. Assuming that he makes no additional purchases on his card, how much must Gary pay every month to reach his goal? (Round all dollar values to the nearest cent.)a.$72.96b.$137.45c.$61.58d.$86.29

Eileen just received her credit scores from the three major credit bureaus. Her Experian score is 824, her Equifax score is 840, and her TransUnion score is 832. What is the mode of Eileen’s credit scores? (Round to the nearest whole point, if necessary.)a.840b.832c.824d.There is no mode in this group.

Greg has a credit card which requires a minimum monthly payment of 2.06% of the total balance. His card has an APR of 11.45%, compounded monthly. At the beginning of May, Greg had a balance of $318.97 on his credit card. The following table shows his credit card purchases over the next few months. Month Cost ($) May 46.96 May 33.51 May 26.99 June 97.24 June 112.57 July 72.45 July 41.14 July 101.84 If Greg makes only the minimum monthly payment in May, June, and July, what will his total balance be after he makes the monthly payment for July? (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. $812.86 b. $830.31 c. $864.99 d. $1,039.72 Please select the best answer from the choices provided

Melissa used her credit card to buy a $745 refrigerator. She kept the refrigerator for exactly nine years, during which time it consumed an average of $0.19 of electricity every day. Melissa’s credit card has an APR of 16.84%, compounded monthly. Melissa paid off her refrigerator by making identical monthly payments for four years. If she made no other purchases with her card, what percentage of the lifetime cost of the refrigerator did the electricity make up? (Assume that two of the years were leap years, and round all dollar values to the nearest cent.)a.59.17%b.18.48%c.66.99%d.37.77%