You charged 1,000 on your credit card for Christmas presents. Your credit card company charges
you 26 annual interest, compounded monthly.
If you make the minimum payments of 25 per
month, how long will it take (to the nearest month) to pay off your balance?
A) 54 months B) 40 months C) 94 months D) 79 months
Question 2
Andrea purchased an auto insurance policy with bodily injury liability limits of 250/500 (250,000/500,000). She also purchased a personal umbrella policy with a 1 million limit and a 500 self-insured retention.
Andrea was talking on her cell phone while driving, and her car struck and killed a pedestrian in a crosswalk. The court ordered her to pay 750,000 to the spouse of the person she killed. How will this claim be settled?
A) The umbrella policy will pay 749,500.
B) Each policy will pay 375,000.
C) 250,000 will be paid under the auto policy and 500,000 will be paid by the umbrella policy.
D) The auto policy will pay 250,000, Andrea will pay 500, and the umbrella policy will pay 499,500.
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