Types of Interest
What is the equation formula to Simple Interest?
Principle Amount x Interest Rate x Time
If in debit and wanted to tranfer that debit to another card, which credit card is the best?
Balance transfer card; no fee to transfer balance from one card to another
why are Minimum payments dangerous?
Can add interest and lead you to debt
when given a credit limit what is the best amount to use
30% or lower
Gina deposited $1500 in an account that pays 4% interest compounded quarterly. What will the balance be in 2yrs?
A=1500(1+ .04/4) 4x2
A=1500(1+.01)4x2
A=1500(1.01)6
A= 1500(1.061)
A= $1623
If you travel for work and are reimbersted, which credit card would you use?
travel rewards card
When given a credit limit, how much should you use?
30% or lower
can making late payments bring down your credit down as a new credit owner?
Yes due to short credit history, payments are major
What is N if an equation was compounded quarterly?
N= 4
If looking for a card that doesn't imply interest for a period of time, which card would you use?
0% APR cards?
If your payment is biweekly, how many times is that a year?
26
What are the Pros and Cons on Minimum payments?
Better than making no payment, athough will bring your last balance over and add interest which can quickly lead to debt.
What is compound interest?
Interest that is calculated using the the ending balance of the last period.
which card would you use if you constantly go to a certain store?
Store cards
if your payment is weekly how many times a year is that?
52
Is it good to have a credit mix? why?
Yes, because it shows your responsible enough to manage different obligations and kinds of debt
What is the equation formula to Compound Interest?
A = P ( 1 + R/N) NxT
Characteristics of a credit card?
APR, Credit limit, Annual fees, Rewards
If %300 is invested at an interest rate of 6.75% compounded semiannually for 20 yrs
300(1+.0675/2) 2x20
300(1+.00337) 2x20
300(1.00337) 40
300( 1.1440)
A= 1,131
Is having new credit beneficial