Which of these credit card purchases would charge the most interest?(1 point)
Responses
a $200 purchase with a monthly interest rate of 2.5%
a $200 purchase with a monthly interest rate of 2.5%
a $100 purchase with a monthly interest rate of 1.5%
a $100 purchase with a monthly interest rate of 1.5%
a $150 purchase with a monthly interest rate of 3%
a $150 purchase with a monthly interest rate of 3%
a $225 purchase with a monthly interest rate of 2%
a $225 purchase with a monthly interest rate of 2%
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The $225 purchase with a monthly interest rate of 2% would charge the most interest because the purchase amount is higher and the interest rate is also higher compared to the other options.
You have a balance of $500 on a credit card with a monthly interest rate of 2%. You make a payment of $15 when you receive your credit card bill. What is the new balance after the payment?(1 point)
Responses
$505
$505
$475
$475
$495
$495
$525
$525
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The new balance after making a payment of $15 on a credit card balance of $500 with a monthly interest rate of 2% would be $485.
Calculation:
$500 (current balance) - $15 (payment) + $10 (interest on $500 at 2%) = $495
You need to buy a new computer that costs $1,200. You are able to save 10% of the cost each month in your checking account. How many months will you need to save to afford the computer?(1 point)
Responses
12 months
12 months
6 months
6 months
10 months
10 months
8 months
8 months
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You are able to save 10% of the cost each month, which means you save 10% of $1,200, which is $120.
To afford the computer, you would need to save a total of $1,200, so:
$1,200 ÷ $120 = 10
Therefore, it would take you 10 months to save enough to afford the computer.
Answer: 10 months
You and your friend go to the store to buy a new set of headphones when they release. The headphones cost $150. You use your debit card to buy the headphones. Your friend uses their credit card to buy the headphones. Their credit card has a monthly interest rate of 2%. If it takes your friend a year to pay off the headphones, who spends less on the purchase and by how much?(1 point)
Responses
You spend $36 less than your friend.
You spend $36 less than your friend.
Your friend spends $3 less than you.
Your friend spends $3 less than you.
You spend $3 less than your friend.
You spend $3 less than your friend.
Your friend spends $36 less than you.
Your friend spends $36 less than you.
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Since you used your debit card to purchase the headphones, there is no interest involved in the transaction. However, your friend used a credit card with a monthly interest rate of 2%.
If your friend takes a year to pay off the $150 purchase at a 2% monthly interest rate, the total cost will increase due to interest.
Calculating the total cost your friend will pay:
$150 + ($150 * 0.02 * 12) = $150 + $36 = $186
You spent $150, while your friend ended up spending $186.
Therefore, you spend $36 less than your friend on the purchase.
Answer: You spend $36 less than your friend.
You buy a $3,000 piece of furniture by opening up a new credit card that offers 0% interest if you pay it off in 24 months. If you do not pay it off by then, you will need to pay 20% interest on the full purchase price. You receive your first bill. The minimum payment is $75. What is the least amount you should pay over the minimum each month so that you will pay off the furniture before the 24-month period ends?(1 point)
Responses
$50 more per month
$50 more per month
$10 more per month
$10 more per month
$25 more per month
$25 more per month
$5 more per month
$5 more per month
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If you have 24 months to pay off the furniture before the 20% interest kicks in, that means the minimum payment each month should be $3000 / 24 = $125.
However, the minimum payment given is $75. To pay off the furniture before the 24-month period ends, you should pay at least $125 - $75 = $50 more per month than the minimum payment given.
Therefore, the least amount you should pay over the minimum each month is $50.
Answer: $50 more per month