Spring '25 - Semester Exam Review

Use the formula to solve the following:

Formula:

finance charge = new balance × periodic rate

Problem:

Sarah has a department store credit card that charges 2.1575% on any unpaid balance for a given month. Last month, she paid off her balance, so the previous balance on this month's statement is $0. This month, she charged $348.25 on her credit card. If she does not pay the balance in full before the grace period, calculate the finance charge.

• $6.95

• $7.09

• $7.51

• $7.37

Tags

CCSS.7.RP.A.3

What is the range of a FICO score?

• 200 to 800

• 500 to 1000

• 0 to 100

• 300 to 850

Tags

CCSS.8.F.A.1

CCSS.HSF.IF.A.1

What is the term for an asset that is pledged as security for a loan?

• Collateral

• Interest

• Credit

• Principal

Use the formulas to solve the following:

Formulas:

standard monthly charge = purchase × (standard APR ÷ 12)

promotional monthly charge = purchase × (promotional APR ÷ 12)

savings = (standard monthly charge - promotional monthly charge) × promotional period

Problem:

If a customer buys an appliance for $1,500 using a credit card with a promotional APR of 5% for six months and the standard APR is 20.5%, what is the total savings over six months?

• $116.22

• $98.75

• $115.13

• $123.00

Tags

CCSS.7.RP.A.3

Use the formula to solve the following:

Formula:

unpaid balance = previous balance - payments - other credits

finance charge = unpaid balance × periodic rate

new balance = unpaid balance + (unpaid balance × monthly finance charge) + new purchases

Problem:

A credit card has a balance of $4000 and a monthly interest rate of 2.3%. The minimum payment is either 2% of the balance or $25, whichever is greater. What is the minimum payment, and what is the new balance after the interest is applied?

• Minimum payment: $92; New balance: $4080.00

• Minimum payment: $80; New balance: $4010.16

• Minimum payment: $80; New balance: $3925.00

• Minimum payment: $25; New balance: $3992.00

Tags

CCSS.HSF.BF.A.2

What is a key difference between a credit card and a debit card?

• A debit card requires monthly payments, while a credit card does not.

• A credit card is directly connected to a checking account, while a debit card is not.

• A debit card charges interest on every purchase, while a credit card does not.

• A credit card allows you to borrow money, while a debit card uses money from your bank account.

Use the formula to solve the following:

Formulas:

debt to income ratio = sum of monthly debt payments ÷ (annual income ÷ 12) × 100

Problem:

David is an IT professional earning $82,500 per year. His monthly expenses include:

Mortgage: $1,925

Car loan: $525.00

Credit cards: $460.75

Phone bill: $100

Water bill: $75.50

What is David's debt-to-income ratio?

• 50.25%

• 44.89%

• 42.50%

• 38.75%

Tags

CCSS.6.RP.A.3C

Use the formula to solve the following:

Formula:

available credit = credit limit - current balance

Problem:

Emily has a credit limit of $3,800. Her current account balance is $1,900.25. She made a $150.00 purchase that hasn’t been added to her balance yet. What is Emily’s remaining available credit?

• $1,849.75

• $1,750.25

• $1,749.75

• $1,850.25

Tags

CCSS.7.NS.A.3

What does your debt-to-income ratio represent?

• The total amount of debt you owe divided by your annual net income.

• The amount of money you owe on your credit cards.

• The amount of interest you pay on your loans.

• The percentage of your monthly gross income required to pay debts.

Tags

CCSS.7.RP.A.3

What does the Annual Percentage Rate (APR) represent?

• The rate of interest you would pay to borrow money for one year

• The monthly interest rate applied to your credit card balance

• The fee associated with late payments

• The total amount of money you save in a year

Tags

CCSS.7.RP.A.3