Review Lessons 5.5-5.9

Ted has a credit card that uses the average daily balance method. For the first 9 days of one of his billing cycles, his balance was $2030, and for the last 21 days of the billing cycle, his balance was $1450. If his credit card's APR is 23%, which of these expressions could be used to calculate the amount Ted was charged in interest for the billing cycle?

Irene has a credit card that uses the previous balance method. The opening balance of one of her 30-day billing cycles was $2510, but that was her balance for only the first 5 days of the billing cycle, because she then paid off her entire balance and didn't make any new purchases. If her credit card's APR is 11%, which of these expressions could be used to calculate the amount Irene was charged in interest for the billing cycle?

Pearl has a credit card that uses the adjusted balance method. For the first 10 days of one of her 30-day billing cycles, her balance was $1120. She then made a purchase for $340, so her balance jumped to $1460, and it remained that amount for the next 10 days. Pearl then made a payment of $580, so her balance for the last 10 days of the billing cycle was $880. If her credit card's APR is 27%, which of these expressions could be used to calculate the amount Pearl was charged in interest for the billing cycle?

• $\left(\frac{0.27}{365}\cdot30\right)\left(540\right)$

• $\left(\frac{0.27}{365}\cdot30\right)\left(1120\right)$

• $\left(\frac{0.27}{365\cdot30}\right)\left(\frac{10\cdot1120+10\cdot1460+10\cdot580}{30}\right)$
  

• $\left(\frac{0.27}{365}\cdot30\right)\left(\frac{10\cdot1120+10\cdot1460+10\cdot880}{30}\right)$
  

Wilbur has a balance of $3740 on his credit card, which he plans to pay off by making a payment of the same amount each month. Which of these monthly amounts will allow Wilbur to pay off his balance the fastest?

• $55

• $60

• $65

• $70

Monique has a balance of $5440 on a credit card with an APR of 17.7%. Paying off her balance in which of these lengths of time will result in her paying the least amount of interest?

• 5 months

• 7 months

• 9 months

• 11 months

Jeremiah's credit card has an APR of 22% calculated on the previous monthly balance. His credit card record for the last 7 months is shown in the table below.

On what amount of money will Jeremiah be charged interest for month 8?

• $220.00

• $301.48

• $460.64

• $550.57

Clayton transferred a balance of $4125 to a new credit card at the beginning of the year. The card offered an introductory APR of 7.9% for the first 5 months and a standard APR of 25.7% thereafter. If the card compounds interest monthly, which of these expressions represents Clayton's balance at the end of the year? (Assume that Clayton will make no payments or new purchases during the year, and ignore any possible late payment fees.)

Dustin just got a new credit card that offers both an introductory APR and a standard APR. If the standard APR is 12.7%, which of the following rates would most likely be the introductory APR?

• 2.7%

• 12.7%

• 22.7%

• 32.7%

Credit card A has an APR of 15.8% and an annual fee of $72, while credit card B has an APR of 19.6% and no annual fee. All else being equal, which of these equations can be used to solve for the principal P for which the cards offer the same deal over the course of a year? (Assume all interest is compounded monthly.)

The most Stanley can afford to pay per year in mortgage payments is $12,000, and his credit score is currently 544. According to the following table for a $150,000 mortgage, by how many points would he need to improve his credit score in order to take a mortgage for $150,000?

• 14 points

• 76 points

• 131 points

• 156 points