8
QuizMultiple Choice

The Cost of Credit — Quiz

Question 8 • Personal Finance

The table shows a schedule of Igor’s payment plan for a used car. Igor’s Payment Plan for the First Three Years Year Balance Monthly Payment End of Year Balance 1 245 point 3 3 dollars 2 245 point 3 3 dollars 8 dollars comma 831 point 8 8 3 245 point 3 3 dollars How much is Igor’s total closed-end credit for the car?

Answer
A
14 dollars comma 719 point 8 0
B
23 dollars comma 551 point 6 8
C
26 dollars comma 495 point 6 4
D
11 dollars comma 775 point 8 4

Explanation

After two years, Igor has made 24 monthly payments. The remaining balance of $8,831.88 equals 36 monthly payments of $245.33, so the plan has 24 + 36 = 60 payments total. The total closed-end credit is 60 × $245.33 = $14,719.80, choice A.

AI-written and checked against the verified answer.

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