Answer:
- C. $114.21
- D. $2741.04
- B. Debt 1, $375
- B. $5.58
- C. Both cards are processed by the same card system services.
Step-by-step explanation:
<h3>1.</h3>
The given formula is useless for two reasons: 1) the variables are not defined; 2) it is missing essential parentheses. We assume it is intended to be ...
M = Pm(1+m)^(na)/((1+m)^(na) -1)
where M is the monthly payment; P is the principal amount of the loan; m is the monthly interest rate; n is the number of payments per year; a is the number of years. Your values are ...
P = $2500, m = 0.0075, n = 12, a = 2
Filling these values into the formula, we get
M = $2500·0.0075·1.0075^(12·2)/(1.0075^(12·2) -1) ≈ $114.21
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<h3>2.</h3>
The 24 payments of $114.21 come to a total payback amount of ...
24 × $114.21 = $2741.04
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<h3>3.</h3>
According to the "stack method", Alice will pay off the debt with the highest interest rate first. That is Debt 3. Its minimum payment of $150 can be added to the amount she applies to the payment of the debt with the second-highest interest rate, Debt 1. Alice can make a payment on Debt 1 of ...
$150 (no longer needed for Debt 3) + $75 (minimum for Debt 1) + $150 (her extra contribution) = $375
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<h3>4.</h3>
The service charge of $2.00 and the per-check charge of $0.10×21 checks total $4.10. This is deducted from the interest earned of 0.008×$1210 = $9.68. The resulting income earned is $5.58.
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<h3>5.</h3>
Debit cards deduct funds from a checking account. Credit cards use funds temporarily loaned. Both cards are processed by the same system.
A debit card carries the risk of an overdraft (or not: the transaction may simply be denied). Whether a particular transaction results in an overdraft generally depends on the sequence in which checking account transactions are processed. A credit card transaction involves loaned money (up to some limit), so cannot cause an overdraft (until a payment is made on the credit card account).
