Financial Algebra 1st Edition Chapter 4 Consumer Credit
Page 175 Problem 1 Answer
Given: Heather’s guitar costs x and she could savey.
To find: express algebraically the number of months it would take Heather to save for the guitar.
We will use the unitary method to solve the problem and get the result.
Since, we know that for a month y dollar is saved.
So, we can say that for n months, we get the saving as n y.
As, the price of guitar costs x
dollars. So, we get the number of months as
x=ny
⇒n=x/y
Thus, we can say that x/y number of months it would take Heather to save for the guitar when Heather’s wants to buy a guitar.
Page 176 Problem 2 Answer
Given: Heather’s wants to buy a guitar.To find: Express the finance charge algebraically.
Total money will be given by the sum of total monthly payment along with down payment.
Since, we know that the monthly payment is w.
So, we get the down payment value as
Also, we know that finance charge, will be found by subtracting purchase price from the total amount paid.
So, we will get the value as
12×w−p+0.2p=12w−0.8p.
Thus, we can say that when Heather’s wants to buy a guitar then the finance charge algebraically will be 12w−0.8p.
Page 177 Problem 3 Answer
Given: The Whittendale family purchases a new refrigerator on a no-interest for-one-year plan.
To find: express their last month’s payment algebraically.In order to get the finance charge, we will subtract purchase price from the total amount paid.
When we have the down payment as zero dollars and we will pay the money at zero interest for x dollars per month then we get the last month’s payment algebraically as
1385−11×x=1385−11x.
Thus, we can say that 1385−11x
will be the last month’s payment algebraically when the Whittendale family purchases a new refrigerator on a no-interest for-one-year plan.
Page 178 Problem 4 Answer
Given: Craig wants to purchase a boat that costs$1420.
To find:Does he have enough for the down payment.
We will get the down payment as the product of the purchase price along with rate that is being given.
Since, we know that down payment is the product of the purchase price along with rate that is being given.
So, we get the value of down payment as
=20%×1420
=0.20×1420
=284
Hence, there is a shortage of $284−$250=$34.
Thus, we can say that $34 is shortage for the down payment when Craig wants to purchase a boat that costs$1420.
Page 178 Problem 5 Answer
Given: Jean bought a$1980 snow thrower on the installment plan.
To find: How much is the down payment.
We will get the down payment as the product of the purchase price along with rate that is being given.
Since, we know that down payment is the product of the purchase price along with rate that is being given.
So, we get the value of down payment as
=10%×1980
=0.10×1980
=198
Thus, we can say that$198 is the down payment when Jean bought a $1980 snow thrower on the installment plan.
Page 178 Problem 6 Answer
Given: Jean bought a snow thrower on the installment plan.
To find: What is the total amount of the monthly payments.
We will get the value of total amount of monthly payment will be a product of number of months along with monthly payment.
Since, we know that value of total amount of monthly payment will be a product of number of months along with monthly payment.
So, we get the value as18×116=2088.
Thus, we can say that $2088 is the total amount of the monthly payments when Jean bought a snow thrower on the installment plan.
Page 178 Problem 7 Answer
Given: Jean bought a snow thrower on the installment plan.
To find: How much did Jean pay for the snow thrower on the installment plan.
Total money will be given by the sum of total monthly payment along with down payment.
Since, we know that total money will be given by the sum of total monthly payment along with down payment.
So, Jean pay for the snow thrower will be198+2,088=2,286.
Thus, we can say that $2286 did Jean pay for the snow thrower on the installment plan.
Page 178 Problem 8 Answer
Given: Jean bought a snow thrower on the installment plan.
To find: What is the finance charge.
In order to get the finance charge, we will subtract purchase price from the total amount paid.
Since, we know that finance charge, will be found by subtracting purchase price from the total amount paid.
So, we will get the value as
2,286−1,980=306.
Thus, we can say that $306 will be the finance charge when Jean bought a snow thrower on the installment plan.
Page 178 Problem 9 Answer
Given: Linda bought a washer and dryer from Millpage Laundry Supplies.
To find: Express her down payment algebraically.
We will get the down payment as the product of the purchase price along with rate that is being given.
Since, we know that down payment is the product of the purchase price along with rate that is being given.
So, we get the value of down payment as15/100×y=0.15y.
Thus, we can say that$0.15y is the down payment when Linda bought a washer and dryer from Millpage Laundry Supplies.
Page 178 Problem 10 Answer
Given: Linda bought a washer and dryer from Millpage Laundry Supplies.
To find: How many monthly payments must Linda make.
Payment is done monthly which means that we have to give the money for twelve months to complete one year.
Since, we know that x dollars are paid for a year, Thus, we can say that payment is done monthly which means that we have to give the money for twelve months to complete one year.
Thus, we can say that 12 monthly payments must Linda make when Linda bought a washer and dryer from Millpage Laundry Supplies.
Page 178 Problem 11 Answer
Given: Linda bought a washer and dryer from Millpage Laundry Supplies.
To find: Express the total amount of the monthly payments algebraically.
We will get the value of total amount of monthly payment will be a product of number of months along with monthly payment.
Since, we know that value of total amount of monthly payment will be a product of number of months along with monthly payment.
So, we get the value as12×x=12x.
Thus, we can say that12x is the total amount of the monthly payments when Linda bought a washer and dryer from Millpage Laundry Supplies.
Page 178 Problem 12 Answer
Given: Linda bought a washer and dryer from Millpage Laundry Supplies.
To find: Express the total amount Linda pays for the washer and dryer on the installment plan algebraically.
Total money will be given by the sum of total monthly payment along with down payment.
Since, we know that total money will be given by the sum of total monthly payment along with down payment.
So, the total amount Linda pays for the washer and dryer on the installment plan algebraically 0.15×y+12×x=0.15y+12x.
Thus, we can say that $0.15y+12x is the total amount Linda pays for the washer and dryer on the installment plan algebraically.
Page 178 Problem 13 Answer
Given: Linda bought a washer and dryer from Millpage Laundry Supplies.
To find: Express the finance charge algebraically.
Total money will be given by the sum of total monthly payment along with down payment.
Since, we know that finance charge, will be found by subtracting purchase price from the total amount paid.
So, we will get the value as(0.15y+12x)−y=12x−0.85y.
Thus, we can say that $12x−0.85y will be the finance charge when Linda bought a washer and dryer from Millpage Laundry Supplies.
Page 178 Problem 14 Answer
Given: Zeke bought a bobsled on the installment plan.
To find: How much interest will he pay.
Total money will be given by the sum of total monthly payment along with down payment.
Since, we know that value of total amount of monthly payment will be a product of number of months along with monthly payment.
So, we get the value as
=24×93.50
=2244
Also, we know that total money will be given by the sum of total monthly payment along with down payment. So, the total amount will be
2244+450
=2694
Since, we know that finance charge, will be found by subtracting purchase price from the total amount paid.
So, we will get the value as
=2694−2300
=394
Thus, we can say that $394 interest will be paid when Zeke bought a bobsled on the installment plan.
Page 178 Problem 15 Answer
Given: Gary is buying a computer on the installment plan.
To find: What is the finance charge.
We will get finance charge when we subtract purchase price from the total amount paid.
Since, we know that value of total amount of monthly payment will be a product of number of months along with monthly payment.
So, we get the value as
=30×48.25
=1447.50
Also, we know that total money will be given by the sum of total monthly payment along with down payment. So, the total amount will be
=1447.50+150
=1597.50
Since, we know that finance charge, will be found by subtracting purchase price from the total amount paid.
So, we will get the value as
=1597.50−1250
=347.50
Thus, we can say that $347.50 is the finance charge when Gary is buying a computer on the installment plan.
Page 178 Exercise 1 Answer
Given: Mazzeo’s Appliance Store requires a down payment of 1/3 and Norton’s Depot requires a 30% down payment.
To find: Which store’s down payment rate is lower.We will compare the values to get the result.
Let us take the price of the product as x.
When Mazzeo’s Appliance Store give us the value for down payment as x/3=0.33x.
Now, for the Norton’s Depot, we get the down-payment as 30%x=0.3x.
Thus, we can say that Norton’s Depot store’s down payment rate is lower.
Page 178 Exercise 2 Answer
We are given : Purchase price=m dollars
Down payment rate=20%
=20/100
=0.20.
Monthly payment=x dollars Number of months =24.
We have to express the finance charge algebraically.
In the question, first we will find the down payment .
Then, find the total amount of monthly payments .
Calculate the total cost and then, find the finance charge.
Firstly, we will find the down payment.
As, down payment is the product of the down payment rate and the purchase price.
Therefore,Down payment=Down payment rate×purchase price
Down payment=0.20×m
Down payment=0.20m .
Now, we will find the total amount of monthly payments .
As, the total amount of monthly payments is the product of the number of months and the monthly payment.
Therefore,Total amount of monthly payments=Number of months×Monthly payment
Total amount of monthly payments=24×x
Total amount of monthly payments=24x.
We will find the total cost .
As, the total cost is the sum of the down payment and the total amount of monthly payments .
Therefore,Total cost=Down payment+Total amount of monthly payments
Total cost=0.20m+24x.
Now, we will find the finance charge .
As, the finance charge is the difference between the total cost and the purchase price .
Therefore,Finance charge=Total cost−Purchase price
Finance charge=0.20m+24x−(m)
Finance charge=24x+0.20−1
Finance charge=24x+(0.20−1)m
Finance charge=24x−0.8 .
The finance charge is 24x-0.80.
Page 178 Exercise 3 Answer
We are given : A spreadsheet for installment purchase calculations.
We have to write a spreadsheet formula to compute the down payment in cellC2.
As, we have to find the down payment in cellC2.
So, we will be using A2andB2, that is of the same row and same column .
The down payment is the product of the down payment rate and the purchase price.
Therefore, C2=A2∗B2.
The spreadsheet formula to compute the down payment in C2is : C2=A2∗B2
Page 178 Exercise 4 Answer
We are given :
A spreadsheet for installment purchase calculations.
We have to write a spreadsheet formula to compute the time in months in cellF2.
We have to compute the time in months in cell F2.
Time in months=F2.
The time in years for the same row (purchase) is given in cell E2.
Time in years=E2.
Since there are12 months in a year, the time in months is the time in years should be multiplied by 12
Time in months = Time in years ×12
F2=E2×12 .
The spreadsheet formula to compute the time in months in cell F2 is :F2=E2×12.
Page 178 Exercise 5 Answer
We are given :
A spreadsheet for installment purchase calculations.
We have to write the spreadsheet formula to compute the finance charge in cell H2 .
We have to find the finance charge .
We will subtract the purchase price of the item from the total amount paid on installment.
Total amount is the sum of down payment and the total of monthly payments.
And, the finance charge is the difference between the total cost and the purchase price .
Finance charge is given by :
H2=(C2+G2)−A2 .
The spreadsheet formula to compute the finance charge in cell H2 is :H2=(C2+G2)−A2 .
Page 178 Exercise 6 Answer
We are given :
A spreadsheet for installment purchase calculations.
We have to use our answers to a−d
to fill in the missing entries f−v.
As, down payment is the product of the down payment rate and the purchase price.
Therefore,
(1)Down payment=1200×0.20
Down payment=$240 .
(2)Down payment=1750×0.10
Down payment=$175 .
(3)Down payment=1340×0.15
Down payment=$201.
(4)Down payment=980×0.10
Down payment=$98 .
The time in months is the time in years multiples by 12 , as there are 12months in a year.
Therefore, (5)Time in months = Time in years ×12
Time in months =1 ×12
Time in months =12.
(6)Time in months =2×12
Time in months =24 .
(7)Time in months=1.5×12
Time in months=18 .
(8)Time in months =0.5×12
Time in months =6.
Now, we will find the total amount of monthly payments.
(9)Total amount of monthly payments=12×97.01
Total amount of monthly payments=$1164.12
(10)Total amount of monthly payments=24×71.12
Total amount of monthly payments=$1706.88
(11)Total amount of monthly payments =18×77.23
Total amount of monthly payments =$1390.14
(12)Total amount of monthly payments =6×165.51
Total amount of monthly payments =$993.06 .
Now, we will find the finance charge .
Finance charge = Total cost − Purchase price
Finance charge= Total amount of monthly payments + Down payment − Purchase price .
(13)Finance charge =1164.12+240−1200
Finance charge =$204.12
(14)Finance charge =1706.88+175−1750
Finance charge =$131.88
(15)Finance charge =1390.14+201−1340
Finance charge =$251.14
(16)Finance charge =993.06+98−980
Finance charge =$111.06.
The missing entries are :
(1)$240
(2)$175
(3)$201
(4)$98
(5)12
(6)24
(7)18
(8)6
(9)$1,164.12
(10)$1,706.88
(11)$1,390.14
(12)$993.06
(13)$204.12
(14)$131.88
(15)$251.14
(16)$111.06.
Page 179 Exercise 7 Answer
We are given :
Purchase price=$1700
Down payment=$0
Monthly payment=$201
Number of months=9 .
We have to find the sumo of the monthly payments and determine the fee charged for the layaway plan .
We will find the total amount of monthly payments .
As, the total amount of monthly payments is the product of the number of months and the monthly payment.
Therefore, Total amount of monthly payments =9×201
Total amount of monthly payments =$1809 .
Now, we will find the total cost .
As, the total cost is the sum of the down payment and the total amount of monthly payments .
Therefore,
Total cost =1809+0
Total cost =$1809 .
Now, we will find the finance charge .
As, the finance charge is the difference between the total cost and the purchase price .
Therefore,
Finance charge =1809−1700
Finance charge =$109 .
The sum of the monthly payments is$1809.
The fee charged for the layaway plan was :$109 .
Page 179 Exercise 8 Answer
We are given :
Purchase price=$4345
Down payment=$0
Monthly payment=$15
Number of months=11 .
We have to find the sum of the monthly payments .
We will find the total amount of monthly payments .
As, the total amount of monthly payments is the product of the number of months and the monthly payment.
Therefore, Total amount of monthly payments =11×15
Total amount of monthly payments =$165 .
The sum of the monthly payments is$165 .
Page 179 Exercise 9 Answer
We are given :
Purchase price=$4345
Down payment=$0
Monthly payment=$15
Number of months=11.
We have to find the amount Chris must pay in the last month of the plan .
We will find the total amount of monthly payments .
As, the total amount of monthly payments is the product of the number of months and the monthly payment.
Therefore, Total amount of monthly payments =11×15
Total amount of monthly payments =$165 .
Now, we will find the total cost .
As, the total cost is the sum of the down payment and the total amount of monthly payments .
Therefore,
Total cost =165+0
Total cost =$165.
The remaining payment is then the difference between the purchase price and the total cost and, there is no interest in this case.
Therefore, only the remaining amount of the purchase price should still have to be paid.
Therefore,Remaining amount =4345−165
Remaining amount =$4180.
Chris must pay$4180
in the last month of the plan.
Page 179 Exercise 10 Answer
We are given :
Fee charged for layaway plan=$109 in the previous exercise.
We have to determine the difference between the layaway plan in the previous exercise and the deferred payment plan.
The layaway price in the prior exercise was$109, however no fee was levied in this exercise’s deferred payment plan.
Furthermore, with a layaway plan, the buyer receives the product once it has been paid in full, whereas with a deferred payment plan, the consumer receives the merchandise at the time of purchase (not after it has been completely paid).
The difference between the layaway plan in and the deferred payment plan is that there is no fee in the deferred payment plan, while the layaway plan contains a fee.
Page 179 Exercise 11 Answer
We are given :
Purchase price=x dollars
Down payment=d dollars
Monthly payment=m dollars
Number of months=23.
In this case, we will not consider the last month as it will have a different payment amount .
We have to express the amount of the last payment algebraically.
We will find the total amount of monthly payments .
As, the total amount of monthly payments is the product of the number of months and the monthly payment.
Therefore,Total amount of monthly payments =23×m
Total amount of monthly payments =23m .
Now, we will find the total cost .
As, the total cost is the sum of the down payment and the total amount of monthly payments .
Therefore,Total cost=23m+d .
The remaining payment is then the difference between the purchase price and the total cost and, there is no interest in this case .
Therefore, only the remaining amount of the purchase price should still have to be paid .
Therefore,Remaining amount=x−(23m+d)
Remaining amount=x−23m−d .
The amount of the last payment is x−23m−d dollars .
Page 180 Exercise 12 Answer
We are given :
Purchase price=$2100
Down payment rate=10%
=10/100
=0.10.
We have to find the dollar value of the down payment.
We will find the down payment.
As, down payment is the product of the down payment rate and the purchase price.
Therefore,Down payment=$2,100×10%
Down payment=$2,100×0.10
Down payment=$210.
The dollar value of the down payment is$210.
Page 180 Exercise 13 Answer
We are given :
Monthly payments=$75
Purchase price=$2100
Down payment rate=10%
Number of months=6 .
We have to find the cost of the rent ,if Sharon decides not to buy the HDTV after the six months .
We will find the down payment .Then, we will find the total amount of monthly payments .We will find the total cost .
Firstly, we will find the down payment .
As, down payment is the product of the down payment rate and the purchase price.
Therefore,Down payment=$2,100×10%
Down payment=$2,100×0.10
Down payment=$210 .
Now, we will find the total amount of monthly payments .
As, the total amount of monthly payments is the product of the number of months and the monthly payment.
Therefore,Total amount of monthly payments =6×75
Total amount of monthly payments = $450 .
Now, we will find the total cost .
As, the total cost is the sum of the down payment and the total amount of monthly payments .
Therefore,Total cost =$210+$450
Total cost=$660 .
The cost of rent was$660 .
Page 180 Exercise 14 Answer
We are given : Regular selling price=$670
Discount rate=10%
Tax rate=8%
Down payment rate=15%
Monthly payment=$58 .
We have to find the discount .
We will find the discount .
As,Discount=Discount rate×Regular selling price
Discount=10%×670
Discount=0.10×670
Discount=$67 .
The discount is $67 .
Page 180 Exercise 15 Answer
We are given :
Regular selling price=$670
Discount rate=10%
Tax rate=8%
Down payment rate=15%
Monthly payment=$58.
We have to find the sale price .
First, we will find the discount and then, we will find the sale price .
Firstly, we will find the discount amount .
As,Discount=Discount rate×Regular selling price
Discount=10%×670
Discount=0.10×670
Discount=$67 .
Now, we will find the sale price .
Sale price=Regular selling price−Discount amount
Sale price=670−67
Sale price=$603 .
The sale price is$603 .
Page 180 Exercise 16 Answer
We are given :
Regular selling price=$670
Discount rate=10%
Tax rate=8%
Down payment rate=15%
Monthly payment= $58.
We have to find the sales tax.
Firstly, we will find the discount amount .
Then, we will find the sale price . We will find the sales tax.
Firstly, we will find the discount amount.
As,Discount=Discount rate×Regular selling price
Discount=10%×670
Discount=0.10×670
Discount=$67 .
Now, we will find the sale price .
Sale price=Regular selling price−Discount amount
Sale price=670−67
Sale price=$603.
We will find the sales tax.
As,Sales tax=Tax rate×Sale price
Sales tax =8%×603
Sales tax =0.08×603
Sales tax =$48.24 .
The sales tax is$48.24.
Page 180 Exercise 17 Answer
We are given :
Regular selling price=$670
Discount rate=10%
Tax rate=8%
Down payment rate=15%
Monthly payment=$58.
We have to find the total cost of the guitar.
Firstly, we will find the discount amount .
Then, we will find the sale price . We will find the sales tax . We will find the total cost.
Firstly, we will find the discount amount.
As,Discount=Discount rate×Regular selling price
Discount=10%×670
Discount=0.10×670
Discount=$67 .
Now, we will find the sale price .
Sale price=Regular selling price−Discount amount Sale price=670−67
Sale price= $603.
We will find the sales tax.
As,Sales tax=Tax rate×Sale price
Sales tax =8%×603
Sales tax =0.08×603
Sales tax =$48.24.
Now, we will find the total cost.
As,Total cost=Sales price+Sales tax
Total cost=603+48.24
Total cost= $651.24.
The total cost of the guitar is$651.24.
Page 180 Exercise 18 Answer
We are given :
Regular selling price=$670
Discount rate=10%
Tax rate=8%
Down payment rate=15%
Monthly payment= $58.
We have to find the down payment.
Firstly, we will find the discount amount.
Then, we will find the sale price .
We will find the sales tax .
We will find the total cost .
We will find the down payment .
Firstly, we will find the discount amount .
As,Discount=Discount rate×Regular selling price
Discount=10%×670
Discount=0.10×670
Discount=$67 .
Now, we will find the sale price .
Sale price=Regular selling price−Discount amount
Sale price=670−67
Sale price=$603.
We will find the sales tax.
As,Sales tax=Tax rate×Sale price
Sales tax =8%×603
Sales tax =0.08×603
Sales tax =$48.24.
Now, we will find the total cost .
As,Total cost=Sales price+Sales tax
Total cost=603+48.24
Total cost=$651.24.
We will find the down payment.
As,Down payment=Total cost×Down payment percentage
Down payment =651.24×15
Down payment =651.24×0.15
Down payment =$97.69.
The down payment is$97.69.
Page 180 Exercise 18 Answer
We are given :
Monthly payment=$58.
We have one year, therefore,
Number of months=12.
We have to find the total of the monthly payments.
We will find the total amount of monthly payments.
Total amount of monthly payments=Number of months×Monthly payment
Total amount of monthly payments=12×58
Total amount of monthly payments=$696.
$696is the total of the monthly payments.
Page 180 Exercise 19 Answer
We are given : Regular selling price=$670
Discount rate=10%
Tax rate=8%
Down payment rate=15%
Monthly payment=$58
Number of months=12, as, we have one year .
We have to find the total Lillian paid for the guitar on the installment plan .
Firstly, we will find the discount amount .
As,Discount=Discount rate×Regular selling price
Discount=10%×670
Discount=0.10×670
Discount=$67.
Now, we will find the sale price .
Sale price=Regular selling price−Discount amount
Sale price=670−67
Sale price=$603 .
We will find the sales tax.
As,Sales tax=Tax rate×Sale price
Sales tax =8%×603
Sales tax =0.08×603
Sales tax =$48.24.
Now, we will find the total cost.
As,Total cost=Sales price+Sales tax
Total cost=603+48.24
Total cost=$651.24.
We will find the down payment.
As,Down payment=Total cost×Down payment percentage
Down payment =651.24×15
Down payment =651.24×0.15
Down payment =$97.69.
We will find the total amount of monthly payments.
Total amount of monthly payments=Number of months×Monthly payment
Total amount of monthly payments =12×58
Total amount of monthly payments =$696.
The total Lillian paid is the sum of the down payment and the total of the monthly payments.
Therefore,
$97.69+$696=$793.69 .
The total Lillian paid for the guitar on the installment plan is $793.69.
Page 180 Exercise 20 Answer
We are given :
Regular selling price=$670
Discount rate=10%
Tax rate=8%
Down payment rate=15%
Monthly payment=$58
Number of months=12.
We have to find the finance charge.
Firstly, we will find the discount amount.
As,Discount=Discount rate×Regular selling price
Discount=10%×670
Discount=0.10×670
Discount=$67 .
Now, we will find the sale price.
Sale price=Regular selling price−Discount amount
Sale price=670−67
Sale price=$603.
We will find the sales tax.
As,Sales tax=Tax rate×Sale price
Sales tax =8%×603
Sales tax =0.08×603
Sales tax =$48.24.
Now, we will find the total cost.
As,Total cost=Sales price+Sales tax
Total cost=603+48.24
Total cost=$651.24.
We will find the down payment.
As,Down payment=Total cost×Down payment percentage
Down payment =651.24×15
Down payment =651.24×0.15
Down payment =$97.69.
We will find the total amount of monthly payments.
Total amount of monthly payments=Number of months×Monthly payment
Total amount of monthly payments =12×58
Total amount of monthly payments =$696.
The total Lillian paid is the sum of the down payment and the total of the monthly payments.
Therefore, $ 97.69+$696=$793.69.
Now, we will find the finance charge.
Finance charge=Total paid−Total cost
Finance charge =$793.69−$651.24
Finance charge =$142.45.
The finance charge is$142.45.
Page 180 Exercise 21 Answer
We are given: The inequalities give information on the credit scores.
Let x represent your credit score.
x>700, your credit score is excellent.
680<x<700, your credit score is good.
620<x<680, your credit score should be watched carefully.
580<x<620, your credit score is low.
x<580, your credit score is poor.
If Mary Ann’s credit score is low, but she receives 40 points for paying off some delinquent debts, we have to explain whether it is possible that her credit rating is now good.
If Mary’s credit score is low, it may be as high as 619.
So her new credit score will be619+40=659 once we acquire40
points. It should be closely monitored.
However, she needs a credit score of 681 to be considered good.
We can conclude that Mary Ann’s credit score will not be good even after a rise by 40 points.
If Mary Ann’s credit score is low, but she receives 40 points for paying off some delinquent debts, it is not possible that her credit rating is now good.
No. Mary Ann’s credit score will not be good even after a rise by 40 points.
Page 180 Exercise 22 Answer
We are given :
Credit line=$8000
Previous balance=$567.91
Payment=$1200
Total purchases=$986.79
Finance charge=$10.00.
We have to find the available credit.
Firstly, we will find the current balance.
As, the current balance is the previous balance decreased by the payment and purchases and finance charge.
Therefore,Current balance =567.91−1200−986.79−10
Current balance =−$1,628.88 .
Now, we will find the available credit.
As, the available credit is the sum of the credit line and the current balance.
Therefore,Availabe credit =8000−1628.88
Availabe credit =$6,371.12.
The available credit is $6,371.12.