Question

Mo has a credit card with a 3% discount on every purchase and an annual percentage rate of 12%. If he is purchasing an electronic reader for $140, which of the following statements is true?

Answer 1

Mo will save more money with the 3% discount than he will pay in interest. the true statement is that Mo will receive a 3% discount, and the final cost for the electronic reader will be $135.8.

Step-by-step explanation:

To determine the final cost for Mo's purchase of the electronic reader with a 3% discount, we can calculate the discount and consider the annual percentage rate (APR).

Discount Calculation:

Discount=Discount Rate ×Purchase Price

Discount=0.03×140

Discount=4.2

Final Cost Calculation:

Final Cost=Purchase Price−Discount

Final Cost=140−4.2

Final Cost=135.8

Now, considering the annual percentage rate (APR) of 12%, it's important to note that this is an interest rate. However, if Mo pays off the full balance promptly, the APR doesn't directly apply.

Therefore, the true statement is that Mo will receive a 3% discount, and the final cost for the electronic reader will be $135.8.