Question

You just obtained a credit card, made a $200 purchase with a $1000 limit, and face a 1.42% monthly interest rate. What is the growth rate of your credit card balance?

a) 0.42
b) 0.0142
c) 14.2
d) 142

Answer 1

The correct answer to the question is b) 0.0142, which represents the monthly growth rate of a credit card balance at a 1.42% monthly interest rate expressed as a decimal.

Step-by-step explanation:

The question asks to determine the growth rate of a credit card balance after making a $200 purchase on a card with a $1000 limit and a 1.42% monthly interest rate. To find the growth rate, which is the rate at which the balance will increase due to interest, we look at the monthly interest rate provided. The monthly interest rate of 1.42% as a decimal is 0.0142. Therefore, the correct answer is b) 0.0142, indicating that the balance will grow at a rate of 1.42% per month if no payments are made.