Answers26-27 Ignite Technical Math-Financial Math - MA2007Simple Contracts

Using Credit Answers

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1
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The legally mandated disclosure of terms and conditions found on every credit card is called the “Schuyler Box.”

A
T
B
F
2
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May currently has a balance of $1,817.43 on her credit card. If she must make a minimum monthly payment of 3.44% of her total balance, what is her minimum payment, to the nearest cent?

A
$5.21
B
$62.52
C
$40.84
D
$51.49
3

Connie has two credit cards, U and V. Card U has a balance of $414.55, and Card V has a balance of $751.81. The minimum monthly payment on Card U is 2.82% of the balance, and the minimum monthly payment on Card V is 3.09% of the total balance. How much greater is the minimum payment on Card V than on Card U?

A
$8.70
B
$10.73
C
$9.51
D
$11.54
4

Which of the following types of credits would best describes home equity loans?a.closed and securedb.closed and unsecuredc.open and securedd.open and unsecured

A
Option
B
Option
C
Option
D
Option
5

What is a closed line of credit?

A
A line of credit with a set maximum credit limit.
B
A line of credit with no interest rate.
C
A line of credit with a fixed total amount.
D
A line of credit with a legally mandated repayment schedule.
6

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
$72.96
B
$137.45
C
$61.58
D
$86.29
7

Which of the following types of credits would best describes home equity loans?

A
closed and secured
B
closed and unsecured
C
open and secured
D
open and unsecured
8

What is an unsecured line of credit?a.A line of credit which does not require collateral.b.A line of credit with a variable interest rate.c.A line of credit offered by an institution other than a bank, such as a department store.d.A line of credit offered to an individual with no credit history.

A
Option
B
Option
C
Option
D
Option
9

Connie has two credit cards, U and V. Card U has a balance of $414.55, and Card V has a balance of $751.81. The minimum monthly payment on Card U is 2.82% of the balance, and the minimum monthly payment on Card V is 3.09% of the total balance. How much greater is the minimum payment on Card V than on Card U?a.$8.70b.$10.73c.$9.51d.$11.54

A
Option
B
Option
C
Option
D
Option
10

Use the following compound interest formula to complete the problem. Sandra has two credit cards, P and Q. Card P has a balance of $726.19 and an interest rate of 10.19%, compounded semiannually. Card Q has a balance of $855.20 and an interest rate of 8.63%, compounded monthly. Assuming that Sandra makes no purchases and no payments with either card, after four years, which card’s balance will have increased by more, and how much greater will that increase be? a. Card Q’s balance increa

Question illustration
A
Option
B
Option
C
Option
D
Option
11

Use the following compound interest formula to complete the problem. Rodney owes $1,541.05 on his credit card. His card has an APR of 16.29%, compounded monthly. Assuming that he makes no payments and no purchases, how much will he owe after one year?

Question illustration
A
$1,561.97
B
$1,811.70
C
$1,792.09
D
$1,541.05
12

Use the following compound interest formula to complete the problem. Sandra has two credit cards, P and Q. Card P has a balance of $726.19 and an interest rate of 10.19%, compounded semiannually. Card Q has a balance of $855.20 and an interest rate of 8.63%, compounded monthly. Assuming that Sandra makes no purchases and no payments with either card, after four years, which card’s balance will have increased by more, and how much greater will that increase be?

Question illustration
A
Card Q’s balance increased by $7.22 more than Card P’s balance.
B
Card Q’s balance increased by $6.69 more than Card P’s balance.
C
Card P’s balance increased by $3.43 more than Card Q’s balance.
D
Card P’s balance increased by $0.80 more than Card Q’s balance.
13

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
14

What is an unsecured line of credit?

A
A line of credit which does not require collateral.
B
A line of credit with a variable interest rate.
C
A line of credit offered by an institution other than a bank, such as a department store.
D
A line of credit offered to an individual with no credit history.

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