The Cost of Credit Answers

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What are the characteristics of an annual percentage rate? Check all that apply.It can change over time for certain kinds of loans.It is the interest charged each year for a loan.It requires the borrower to pay all the principal at once.It can be reduced to reflect the borrower’s credit history.It has little impact on the amount the borrower must repay.

A
It can change over time for certain kinds of loans.
B
It is the interest charged each year for a loan.
C
It requires the borrower to pay all the principal at once.
D
It can be reduced to reflect the borrower’s credit history.
E
It has little impact on the amount the borrower must repay.
7

Why is credit card A the better option?

A
It has the highest interest rate, but the lowest annual fee.
B
It has the lowest interest rate and annual fee after the first year.
C
It has the lowest interest rate for the first year and no annual fee.
D
It has the lowest annual fee for the first year and the lowest interest rate.

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