Question

mo has a credit card that gives a 3% discount on every purchase. the annual percentage rate on the card is 12%.
he is purchasing an electronic reader for $140. check all that apply.

if mo uses the credit card and pays the full balance during the billing cycle, the cost of the purchase will be $140.
x if mo pays cash, the cost of the purchase will be $140.
if mo uses the credit card and pays off the balance at $30 a month for 7 months with no late fees, the cost of the purchase will be $143.34.
if mo pays cash, the cost of the purchase will be $135.80.
if mo uses the credit card and pays off the balance at $20 a month for 7 months with no late fees, the cost of the purchase will be $139.89.
x if mo uses the credit card and pays the full balance during the billing cycle, the cost of the purchase will be $135.80.

Explanation:

Calculate cash purchase cost

Using the Credit Card Discounts knowledge point

$$ \text{Cash Cost} = \$140.00 $$

Calculate credit card cost with full balance payment

Using the Credit Card Discounts knowledge point

$$
LATEXBLOCK0
$$

Evaluate interest-bearing payment options

Using the Credit Card Interest and Monthly Interest Rate knowledge points

$$
LATEXBLOCK1
$$

For a monthly payment of \(P = \$20\):

$$
LATEXBLOCK2
$$

Total paid:

$$ (6 \times \$20) + \$21.32 = \$141.32 eq \$139.89 $$

For a monthly payment of \(P = \$30\):

$$
LATEXBLOCK3
$$

Total paid:

$$ (4 \times \$30) + \$19.70 = \$139.70 eq \$143.34 $$

Identify correct statements

Based on the calculations:

• "If Mo pays cash, the cost of the purchase will be $140." is correct.
• "If Mo uses the credit card and pays the full balance during the billing cycle, the cost of the purchase will be $135.80." is correct.

Answer:

• If Mo uses the credit card and pays the full balance during the billing cycle, the cost of the purchase will be $140.
• If Mo pays cash, the cost of the purchase will be $140. (Correct answer)
• If Mo uses the credit card and pays off the balance at $30 a month for 7 months with no late fees, the cost of the purchase will be $143.34.
• If Mo pays cash, the cost of the purchase will be $135.80.
• If Mo uses the credit card and pays off the balance at $20 a month for 7 months with no late fees, the cost of the purchase will be $139.89.
• If Mo uses the credit card and pays the full balance during the billing cycle, the cost of the purchase will be $135.80. (Correct answer)