Estimate the Answer by Picking the Best Choice Without Calculating

question 108

Multiple Choice

Estimate the answer by picking the best choice without calculating. A reasonable APR for a credit card is

• A) 17%
• B) 35%
• C) 9% __________ (Enter A, B, or C )

---

Definitions:

Rate of inflation

The percentage increase in the general price level of goods and services in an economy over a period of time.

Purchasing power

The value of a currency expressed in terms of the amount of goods or services that one unit of money can buy.

Compounded monthly

A method where interest is calculated on the principal and any accumulated interest each month, effectively increasing the amount on which future interest is earned.

Deferral period

A span of time during which payments, obligations, or other actions are postponed or delayed.