Is Ling Using his Credit Card Wisely

# Is Ling Using his Credit Card Wisely - IsLingUsing1 Unit 5...

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Is Ling Using     1 Unit 5: Consumer Credit - Project You must show your work on all problems. You may type your answer right into this document. Total points for project: 45 Points. Projects must be submitted as a Microsoft Word document and uploaded to the Dropbox for Unit 1 . All Projects are due by Tuesday at 11:59 PM ET of the assigned Unit. NOTE: Project problems should not be posted to the Discussion threads. Questions on the project problems should be addressed to the instructor by sending an email or by attending office hours. Part I. Basic Computations 1. The Morrison family bought a car for \$22,000 was which was financed at \$600 per month for 40 months. The down payment was \$3000. a. What is the Installment Price? (5 Points) Answer: \$600x44=\$26,400, So \$26,400+\$3,000= \$29,400 as installment price. b. What is the financial charge and amount financed? (5 Points) Answer: \$26,400-\$22,000= \$4,400 is finance charge. \$22,000-\$3,000= \$19,000 is the amount financed. 2. Jason’s credit card’s beginning unpaid balance for August is \$2,000. During the August billing cycle he made a payment of \$200 and used card to purchase \$50 worth of grocery. Credit card charges 24% annual percentage rate and uses the unpaid balance method. a. What is the finance charge at the end of August? (5 Points) Answer: \$2,000+\$50-\$200= \$1850 Monthly charge is 24%/12=2%, So \$1,850x.02= \$37 is the finance charge at the end of August.

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