Aria has a credit card that gives a 5% discount on every purchase and free shipping when used online. The annual percentage rate on the credit card is 18%. Aria wants to buy a doghouse that costs $580. Which statement about the cost of the doghouse is true?
Answer
A
If Aria uses the credit card and pays the full balance during the billing cycle, she will spend $2.42 less than paying cash for the doghouse.
B
If Aria uses the credit card and pays the full balance during the billing cycle, she will spend $8.70 less than paying cash for the doghouse.
C
If Aria uses the credit card and pays the full balance during the billing cycle, she will spend $29.00 less than paying cash for the doghouse.
D
If Aria uses the credit card and pays the full balance during the billing cycle, she will spend $104.04 less than paying cash for the doghouse.
Explanation
The 5% discount on the $580 doghouse is $580 × 0.05 = $29.00. Because Aria pays the full balance during the billing cycle, she does not pay interest, so the credit card lets her spend $29.00 less than paying cash. The true statement is that she saves $29.00.
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