Question 15 . If Tony Jones knows he can get a car loan for up to 5 years at a credit union but decides that he can easily repay the loan in 3 years , and therefore gets a 3-year loan , how is Tony reducing the lender ' s risk ?
He is sharing the interest rate risk with his lender .
He is pledging valuable assets that can be seized if the loan is not repaid .
He is repaying the loan over a faster period of time . He is taking a larger stake in the asset he is purchasing . He is obtaining the loan from the credit union .
Question 16 . Sarah Russell starts the month with a balance of $ 1,000 on her credit card . On the 10th day of the month , she purchases $ 200 in clothes with her credit card . On the 15th day of the month she makes a payment on her credit card of $ 500 . The average daily balance for the month including the new purchase is $ 883 . The average daily balance for the month excluding the new purchase is $ 750 . Sarah ' s interest rate is 1.5 % for the month . Sarah ' s bank calculates the finance charge on the credit card by using the average daily balance , excluding new purchases . What would Sarah ' s finance charges be for the month ?
$ 7.50 $ 13.25 $ 18.00 $ 15.00 $ 11.25