Question

4. Suppose you have two credit cards. The first has a balance of $410 and a credit limit of $1,000. The second has a balance of $510 and a credit limit of $1,000. What is your overall credit utilization?

36%
26%
16%
46%
56%

Answer 1

I think the answer is 36% sorry if I'm wrong!

Answer 2

Answer is 46%.

Following are the calculations

Both cards have credit limits of $1000

First car has a balance of $410

So 1st card utilization is 410/1000= 0.41*100= 41%

2nd card balance is $510

So 2nd card utilization is 510/1000= 0.51= 51%

So total utilization of cards is (41% + 51%) / 2 = 46%