Question

1.which of the following best describes compound interest?
a. simple interest is calculated on the principal only; compound interest is calculated on both principal and accumulated interest.
b. compound interest charges less over time.
c. simple interest changes monthly; compound interest does not.
d. they are calculated the same way.

1. what happens if a borrower misses multiple payments on a credit card?

a. the interest rate may increase and the credit score may drop.
b. the credit limit automatically increases.
c. the account is closed with no penalty.
d. the credit score improves due to higher usage.

1. if a credit card has a 25% apr and you carry a $1,200 balance for one year without payments, about how much interest would you owe?

a. $25
b. $250
c. $300
d. $1,500

1. what is one advantage of paying more than the minimum payment on a loan or credit card each month?

a. it increases your interest rate.
b. it reduces the total interest paid and shortens the payoff time.
c. it lowers your credit limit.
d. it damages your credit score.
5.which of the following types of loans typically has the lowest interest rate?
a. payday loan
b. credit card cash advance
c. auto loan with collateral
d. unsecured personal loan

Explanation:

1. La diferencia entre interés simple e interés compuesto es que el interés simple se calcula solo sobre el capital, mientras que el interés compuesto se calcula sobre el capital y los intereses acumulados.
2. Si un deudor no realiza múltiples pagos en una tarjeta de crédito, la tasa de interés puede aumentar y la puntuación crediticia puede bajar.
3. Si una tarjeta de crédito tiene un 25% de TEA y se lleva un saldo de $1.200 durante un año sin pagos, el interés se calcula como \( I = P\times r\times t \), donde \( P = 1200 \), \( r=0,25 \) y \( t = 1 \). Entonces \( I=1200\times0,25\times1 = 300 \).
4. Pagar más que el pago mínimo en una tarjeta de crédito o préstamo reduce el interés total pagado y acorta el tiempo de amortización.
5. Los préstamos con garantía, como los préstamos automotrices con garantía, generalmente tienen tasas de interés más bajas que los préstamos sin garantía o los préstamos de préstamo de pago.

Answer:

1. A. Simple interest is calculated on the principal only; compound interest is calculated on both principal and accumulated interest.
2. A. The interest rate may increase and the credit score may drop.
3. C. $300
4. B. It reduces the total interest paid and shortens the payoff time.
5. C. Auto loan with collateral