Question

Mary receives a $10,000 inheritance on her 21st birthday. She pays $500.00 a month for rent; owes

$9,000.00 on her car loan with an interest rate of 5%; and owes $50,000 in student loan debt with a fixed

interest rate of 3%. She has a Visa Card with a balance of $600 at 16% interest.

Which is the wisest choice for Mary?

A

Use it all to pay down the student loan deb

B

Put it all in a savings account that has an interest rate of 2%.

C

Use most of it to pay off the $600 credit card and

a

D

Use it all to pay rent in advance.

Answer 1

C

Use most of it to pay off the $600 credit card and a

a

Explanation:

Base on the scenario been described in the question, the wisest thing Mary should do after receiving $10,000 inheritance on her 21st birthday is to Use most of it to pay off the $600 credit card and Use it all to pay down the student loan debt