Personal Finance (MindTap Course List)
13th Edition
ISBN: 9781337099752
Author: E. Thomas Garman, Raymond Forgue
Publisher: Cengage Learning
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You owe $2,000 on a credit card that charges 20% interest. You have $2,200 in your savings account that earns 1.69% interest. Your savings account charges $14.50 a month if you keep a balance of less than $1,500 a month. Compare the amount of interest for both to decide what you should do about paying the credit card bill. Consider all factors in the decision. Show your for any calculations you may completed.
1. If you are trying to build credit by using a credit card, each time you make a purchase with the credit card, deduct that amount from your checking account. That way, when your credit card bill is due, you will have enough to pay the credit card off in full. Lizzie is going to start doing this. She plans on paying her credit card bill in full this month. How much does she owe with a 6% APR and the following transactions? (Round your answer to the nearest cent.)
31-day billing cycle
10/1
Previous balance
$ 1,170
10/3
Credit
$ 73 cr.
10/12
Charge: King Soopers
154
10/15
Payment
370 cr.
10/25
Charge: Delta
327
10/30
Charge: Holiday Fun
67
You owe $2,000 on a credit card that charges 20% interest. You have $2,200 in your savings account that earns 1.69% interest. Your savings account charges $14.50 a month if you keep a balance of less than $1,500 a month. Compare the amount of interest for both to decide what you should do about paying the credit card bill. Consider all factors in the decision. Show your for any calculations you may completed.
In a brief paragraph, justify your decision, including a description of all factors that would affect that decision.
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