Unit 12 Review

Which of these ARE characteristics of a credit card? (check ALL that apply)

• linked to a deposit account

• impacts credit score

• you pay interest

• borrowed money

Which of these ARE characteristics of a DEBIT card? (check ALL that apply)

• linked to a deposit account

• helps to avoid high-interest debt

• you pay interest

• borrowed money

True or False: A credit card draws money from funds that have been deposited in a customer's bank account.

• True

• False

Suppose you earn 1.5% cash back at grocery stores and 1% on all other purchases. If you spent $485.72 at the grocery store and $671.28 on all other purchases, how much would your cash back be?

• $14.00

• $11.57

• $17.53

• $17.36

You have a $3,700 limit on your credit card. What is the largest balance you should carry on this card to maintain an acceptable debt ratio?

• $185

• $1,591

• $7,400

• $1,850

You have a remaining balance of $4,500 on your 22.79% APR credit card. How much will you pay on the 1st day of the billing cycle (credit cards are compounded daily)?

https://www.calculatorsoup.com/calculators/financial/compound-interest-calculator.php

• 
  $4,585.06

• 
  $5,525.55

• 
  $4,584.29

• $4,502.81

You have a remaining balance of $4,500 on your 22.79% APR credit card. How much will you pay on the 30th day of the billing cycle (credit cards compound daily)?

https://www.calculatorsoup.com/calculators/financial/compound-interest-calculator.php

• $4,502.81

• $4,585.06

• $4,584.29

• $5,525.55

FROM THE PREVIOUS 2 QUESTIONS: How much did you save paying on the 1st day of the billing cycle compared to the 30th day?

https://www.calculatorsoup.com/calculators/financial/compound-interest-calculator.php

• $85.06

• $2.81

• $82.25

• $87.87

You have a remaining balance of $1,500 on your 12.45% APR credit card. You paid the balance in full on the next billing cycle (1 month). How much would the balance be at that point?

The interest on the credit card compounds daily.

https://www.calculatorsoup.com/calculators/financial/compound-interest-calculator.php

• $1,515.64

• $1,508.32

• $1,514.60

• $1,516.90

Suppose you have an outstanding balance of $300 on your credit card, which has a 24% APR. You have carefully considered your budget and decided that you can afford to pay $75 per month until the balance is paid in full. You have also decided that you will not make any additional purchases using the card until it has a $0 balance.

How many months will it take to pay off this credit card?

https://www.experian.com/blogs/ask-experian/credit-card-payoff-calculator/

• 2

• 3

• 4

• 5