Question

Which of the following are true if you pay only the minimum amount each month towards your credit card bill? AYou will be charged interest on your remaining balance. BYour Annual Percentage Rate will increase. CYou may be in debt for a long time. DBoth A and B are true.

Answer 1

Answer:

A- You will be charged interest on your remaining balance.

C- You may be in debt for a long time.

Step-by-step explanation:

The following are true if you pay only the minimum amount each month towards your credit card bill:

Firstly one will be charged interest on the remaining amount. Suppose you had a bill of $500. But you paid the minimum of $100. So, you will be charged your standard interest rate on $400.

And with this format, one will be in a debt for a long time as each month some new balance will be added to the previous one.

So, options A and C are true.

B is not true as the interest rates are not changed during the cycle.

Answer 2

Option A is correct that you will be charged interest on your remaining balance.

Further Explanation:

If a person pays minimum amount each month towards the credit card bill then he will be charged on the remaining amount and in the long run the person may be in depth.

Option A is correct as the person will be charged interest on the remaining balance if he pays a minimum amount on a bill.

Option B is not correct as Annual Percentage rate will not increase because it doesn’t depends on amount or remaining balance.

Option C is not correct because the amount of a bill is decreases each month as the person is paying the minimum amount each month.

Option D is not correct because Annual Percentage rate will not increase because it doesn’t depends on amount or remaining balance.

Hence,Option A is correct that you will be charged interest on your remaining balance.

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Answer details:

Grade: High School

Subject: Mathematics

Chapter: Credit Risk

Keywords: interest, amount, loan, credit card, debit card, bill, minimum amount, remaining balance, Annual Percentage Rate, depth, long time, monthly payment.