1.
Which statements best describe the difference between an APR and an APY?
(1 point)
APR represents the amount of interest including the effects of compounding. APY represents the amount of interest without considering the effects of compounding.
APR represents the amount of interest without considering the effects of compounding. APY represents the amount of interest including the effects of compounding.
APR represents the amount of interest someone will pay each year on a loan. APY represents the amount of interest someone will earn each year on an account.
APR represents the amount of interest someone will earn each year on an account. APY represents the amount of interest someone will pay each year on a loan.

2.
Farrah opens a credit card with an APR of 17.75% compounded monthly. How much is charged in interest this month if her balance is $1,750?
(1 point)
$17.75
$25.89
$145.83
$310.63

3.
Herman opened a credit card at a department store with an APR of 24.45% compounded semiannually. What is the APY on this credit card?
(1 point)
48.90%
12.13%
33.63%
25.94%

4.
Grady is comparing three investment accounts offering different rates.

Account A: APR of 4.95% compounding monthly
Account B: APR of 4.85% compounding quarterly
Account C: APR of 4.75% compounding daily

Which account will give Grady at least a 5% annual yield?
(1 point)
Account A
Account B
Account C
Account B and Account C

5.
Jeremiah has a previous balance of $594 on a credit card with a 12.7% APR compounded monthly. If he made a payment of $25 this month, what is the new balance on his credit card?
(1 point)
$575.29
$644.44
$569.00
$669.44

6.
Larry uses his credit card to purchase a new video game system for $445.07. He can pay off up to $200 per month. The card has an annual rate of 13.6% compounded monthly. How much total interest will he pay?
(1 point)
$8.47
$10.21
$53.54
$3.32

7.
Use the details of Petra’s new credit card to answer the question that follows.
APR 15.9% compounded monthly
Grace Period 30 days
Minimum Payment 4.5% of the remaining balance or $15, whichever is higher

Petra charged $725 to her credit card last month. What is the first minimum payment she must make?
(1 point)
$15.00
$32.63
$72.50
$115.28

8.
In which situation would it be better to use a credit card instead of cash?
(1 point)
purchasing movie tickets
purchasing groceries
purchasing a computer
purchasing gasoline

9.
Which piece of information is not found in the public records section of a credit report?
(1 point)
criminal record
bankruptcies
liens
late payments

11.
Choose the fragment that best completes the following sentence. If you have a high credit score, you are more likely to
(1 point)
receive a higher interest rate.
be turned down for a loan.
pay your balance in full.
make payments late.

12.
Use the table below showing the different types of savings accounts a bank offers to answer the question that follows.
Standard
Savings Money
Market
Savings HighYield
Savings CD
Opening Deposit
Requirement $25 $100 $25,000 $2,500
Interest Rate Variable Variable Variable Variable
Option to Write
Checks yes yes
Account Alerts yes yes yes yes
Features Up to 6
withdrawals
per month Up to 3
withdrawals
per month Up to 3
withdrawals
per month Penalty if
money
withdrawn
before
maturity
Monthly Fee $3 per
month
unless you
maintain a
$300
balance $10 per
month
unless you
maintain
a $3,500
balance $25 per
month
unless you
maintain a
$25,000
balance none

Christina has $30,000 to open a savings account. She will not need access to this money for many years. Which account is the best choice for Christina?
(1 point)
Standard Savings
Money Market Savings
High Yield Savings
CD

13.
Leah owes $4,206 on a credit card with an 18.7% interest rate compounded monthly. What is the monthly payment she should make in order to pay off this debt in 4 years, assuming she does not charge any more purchases with the card?
(1 point)
$786.73
$87.63
$125.10
$387.01
Essay

Your teacher will grade your responses to ensure you receive proper credit for your answers.
14.
Describe, using complete sentences, the advantages and disadvantages of using cash.
(8 points)
15.
Explain, using complete sentences, three steps one could take to pay off their debt.
(8 points)

Answer rating: 100% (QA)

1 APR represents the amount of interest including the effects of compounding APR is a compound interest rate which means it takes into consideration the annual percentage rate and includes the interes... View the full answer