Question

aria has a credit card that gives a 5% discount on every purchase and free shipping when used online. the annual percentage rate on the credit card is 18%. aria wants to buy a doghouse that costs $580. which statement about the cost of the doghouse is true?

if aria uses the credit card and pays the full balance during the billing cycle, she will spend $2.42 less than paying cash for the doghouse.
if aria uses the credit card and pays the full balance during the billing cycle, she will spend $8.70 less than paying cash for the doghouse.
if aria uses the credit card and pays the full balance during the billing cycle, she will spend $29.00 less than paying cash for the doghouse.
if aria uses the credit card and pays the full balance during the billing cycle, she will spend $104.04 less than paying cash for the doghouse.

Explanation:

Calculate the cash price of the doghouse

The original price of the doghouse is given as \(P = \$580\). Paying cash means paying this full amount:

$$ \text{Cash Cost} = \$580.00 $$

Calculate the credit card price with discount

Using the Credit Card Interest knowledge point

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Determine interest charges when paying the full balance

Using the Credit Card Interest knowledge point

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Compare the total costs

Using the Credit Card Interest knowledge point

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Answer:

• (A) If Aria uses the credit card and pays the full balance during the billing cycle, she will spend $2.42 less than paying cash for the doghouse.
• (B) If Aria uses the credit card and pays the full balance during the billing cycle, she will spend $8.70 less than paying cash for the doghouse.
• (C) If Aria uses the credit card and pays the full balance during the billing cycle, she will spend $29.00 less than paying cash for the doghouse. (Correct answer)
• (D) If Aria uses the credit card and pays the full balance during the billing cycle, she will spend $104.04 less than paying cash for the doghouse.