Due to Poor Spending Habits, Ricky Has Accumulated $10,000 in Credit

question 126

Multiple Choice

Due to poor spending habits, Ricky has accumulated $10,000 in credit card debt. He has missed several payments and now the annual interest rate on the card is 18.95 percent! If he pays $175 per month on the card, in total, how much interest expense does Ricky pay to the credit card company?

• A) $15,987.50
• B) $17,008.52
• C) $12,905.13
• D) $8,714.62

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Definitions:

Terracing

The practice of shaping steep terrain to provide flat areas suitable for agriculture or ranching, or to protect soil from erosion.

Erosion

The transportation of sediment, soil, rocks, and other materials by the actions of wind, water, or ice, often leading to the reshaping of landforms.

Angle of Repose

The steepest angle at which a sloping surface formed of a particular loose material is stable.

Slope Failure

The sudden or gradual collapse of a slope that is too steep for its material to resist the pull of gravity.