Question

Chandler has been saving money from his paycheck each month to buy a computer. Joey doesn't have the cash to buy a computer, but he has a Big Buy store credit card and uses it to buy a computer. Which of the following best compares the results of their choices?
Chandler will have to wait to buy a computer, but he will not pay interest charges, unlike Joey.
Joey can avoid paying sales tax by purchasing the computer with his credit card, unlike Chandler.
Chandler will use his saved money for the computer, while Joey can avoid payment by using credit.
Joey does not have to wait to buy a computer, and he can pay less money than Chandler overall.
Question 17(Multiple Choice Worth 3 points)

Answer 1

The answer is B. Just took the exam and got it correct.

Answer 2

Answer:

Option A. While Chandler will have to wait to buy a computer, he will not pay interest charges, unlike Joey.

Explanation:

A credit card is issued by a financial company that allows cardholders to borrow funds from the institution while the cardholder agrees to pay back with an interest rate. A store credit card, like the one Joey has, functions in a similar way to traditional credit card but within a specific store or group of stores. The interest rate that cardholders pay with a store credit card is higher than the one of traditional credit cards. Therefore, while Chandler will have to wait in order to buy a computer, he will not have to pay interest charges like Joey who has a store credit card, as he will likely make the purchase with cash.