Most Credit Cards Provide for a Minimum Finance Charge Of 50

question 194

Multiple Choice

Most credit cards provide for a minimum finance charge of $50$ cents per month. Suppose that you buy a $38 item, make five monthly payments of $5, and then pay the remaining balance. What are the payments and the total interest for this purchase if the interest rate is 12% but you pay the minimum finance charge?

• A) 5 payments of $5 plus a last payment of $2.50; total payments of $40.50 with interest of $2.50.
• B) 5 payments of $5 plus a last payment of $2.50; total payments of $40.50 with interest of $15.50.
• C) 5 payments of $5 plus a last payment of $2.50; total payments of $53.50 with interest of $15.50.
• D) 5 payments of $5 plus a last payment of $15.50; total payments of $40.50 with interest of $2.50.
• E) 5 payments of $5 plus a last payment of $15.50; total payments of $53.50 with interest of $15.50.

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Definitions:

Correlational Methods

Research methods that examine how variables are naturally related in the real world. The researcher makes no attempt to alter the variables or assign causation between them.

Personal Examples

Individual instances or situations from one's own life used to illustrate or explain a concept, idea, or phenomenon.

Strongly Related

Describes a significant association or connection between two variables or concepts.

Structuralism

An approach in psychology that emphasizes analyzing components of the mind's structure through introspection and understanding how these components fit together.