Question

10 multiple choice 1 point how can your credit score impact your financial well - being? consumers with low scores get lower interest rates on loans than those with high scores your credit score can determine whether you are approved for a loan and what the interest rate on that loan will be only consumers with high scores are approved for credit it generally has no impact on your financial situation 11 multiple choice 1 point derek has a credit card with a $1000 credit limit. his outstanding balance is currently $800. what is the maximum amount he can now spend on this credit card? $800 $1800 $1000 $200 12 multiple choice 1 point what is an advantage of using a credit card? it will not affect your credit score or credit history since it is tied directly to your checking account, it prevents you from spending money you do not have you can make an emergency purchase that you otherwise dont have the money to pay for right now if you need to carry a balance, the interest rates are generally quite low (less than 5%)

Explanation:

Question 10

A credit score is a numerical representation of a consumer's creditworthiness. Lenders use it to assess the risk of lending money. A low - credit - score consumer is seen as a higher risk, so they usually get higher interest rates (not lower, so the first option is wrong). Many consumers with lower scores can still get credit (so the third option is wrong). A credit score has a significant impact on financial well - being (so the fourth option is wrong). The credit score can determine loan approval and interest rate as it reflects the borrower's ability to repay.

Step1: Calculate available credit

The formula for available credit is \(Available\ credit=Credit\ limit - Outstanding\ balance\).
We know that the credit limit \(C = 1000\) and the outstanding balance \(B=800\).

Step2: Substitute values into the formula

Substitute \(C = 1000\) and \(B = 800\) into the formula \(A = C - B\). So \(A=1000 - 800\).

Step3: Calculate the result

\(1000-800 = 200\)

Using a credit card can affect credit score (so the first option is wrong). A credit card is not directly tied to a checking account in the way that it prevents over - spending like a debit card (so the second option is wrong). Credit card interest rates for carrying a balance are generally high (often well above 5%, so the fourth option is wrong). One of the main advantages of a credit card is that it allows for emergency purchases when one doesn't have the immediate funds.

Answer:

Your credit score can determine whether you are approved for a loan and what the interest rate on that loan will be

Question 11