From the statements below, identify the way or ways in which making only minimum monthly payments on a long-term credit purchase

Question

2 years ago

15

From the statements below, identify the way or ways in which making only minimum monthly payments on a long-term credit purchase

can be a disadvantage. I. It is illegal to make only the minimum payments for more than one year. II. Repeatedly making minimum payments harms your credit score. III. The total cost is higher if the length of the debt is longer. A. I and II b. II only c. I and III d. II and III Please select the best answer from the choices provided A B C D.

Business

2 answers:

Fudgin [204] · Answer 1 · 2022-12-21T14:45:15+03:00

The long-term period is considered when an interest-free duration stays between 1 year and 14 months or more prolonged. This is useful if a person is making a major purchase through the EMI process.

<h3>What is the EMI process?</h3>

The EMI stated the equated monthly installments. It is a fixed payment created by a recipient to an investor on a stipulated date of every month.

This process is mainly used to require extra time to pay the full payment in installments without investment interest.

If the purchase is made through an EMI process, the borrower must pay overmuch interest, which is a considerable burden or disadvantage of a loan that is based on EMI.

Likewise, if a borrower always makes the tiniest payments, as a result, his credit score would suffer.

Therefore, option D is correct.

To learn more about the EMI process, refer to:

brainly.com/question/10338482

N76 [4] · Answer 2 · 2022-12-21T13:18:22+03:00

If an interest-free period lasts between 12 and 14 months or longer, it is considered long-term. This is useful if you are making a major purchase and need extra time to pay it off without incurring interest.

<h3>what is the EMI process?</h3>

In the case of an EMI-based purchase or loan, the more you pay, the more times you pay.

If we make more payments or installments during the EMI process, we must pay more interest, which is a significant disadvantage of an EMI-based loan.

Similarly, if we consistently make minimal payments, our credit score would suffer as a result.

As a result, Option "D" is the correct answer.

For more information about long-term credit purchase refer to the link:

brainly.com/question/17211939