Question

question 9 of 20
who is most likely to get a good credit card rate based on their debt - to - credit ratio?
a. august has a credit limit of $2,000 and a balance of $300.
b. darius has a credit limit of $6,000 and a balance of $1,200.
c. lenore has a credit limit of $10,000 and a balance of $3,500.
d. laurel has a credit limit of $5,000 and a balance of $500.

Explanation:

Step1: Calculate debt - to - credit ratio for August

Debt - to - credit ratio formula is \(\text{Ratio}=\frac{\text{Balance}}{\text{Credit Limit}}\).
For August: \(\frac{300}{2000}= 0.15\)

Step2: Calculate debt - to - credit ratio for Darius

For Darius: \(\frac{1200}{6000}=0.2\)

Step3: Calculate debt - to - credit ratio for Lenore

For Lenore: \(\frac{3500}{10000}=0.35\)

Step4: Calculate debt - to - credit ratio for Laurel

For Laurel: \(\frac{500}{5000}=0.1\)

Answer:

D. Laurel has a credit limit of $5,000 and a balance of $500.