Question

Andrea has a credit score of 895 and Ashley has a credit score of 768. Stutts National Bank has determined that both will receive a credit card; however, the borrower with the lower credit score will be charged a $50.00 fee the first time she makes a purchase. If both receive a credit card with $1,500.00 available credit, what will Ashley's remaining available credit be after she purchases a $425.00 Coach bag?

Answer 1

Ashley's remaining available credit after her first purchase is $1025.00

Explanation:

Here we are told that the borrower with the lower credit score will be charged $50.00 fee after the first purchase

Therefore, we have

Credit score Andrea = 895

Credit score for Ashley = 768

Therefore, Ashley has the lower credit score hence after her first purchase of a $425.00 Coach bag, we have

Available credit = Initial balance - Purchase - Charges

∴ Available credit = $1,500.00 - ($425.00 + $50.00) = $1025.00

Therefore, Ashley's remaining available credit after she purchases the $425.00 Coach bag = $1025.00.