Question

Josephine decided to get this Platinum card since she saw the ads touting the "0% A.P.R. Platinum. Sign Up Now." After reading this agreement, which of the following statements is TRUE?

a. Her A.P.R will change after six months and be between 15.24% to 23.24% assuming that she has been making on-time payments during those first six months.
b. She will not pay interest on any of the purchases she makes on this credit card for the first year.
c. All her purchases on this credit card are FREE for the first six months.
d. All her purchases on this card are FREE.

Answer 1

Answer:

Answer is A, I'm 70% sure.

Answer 2

Concept Introduction: Annual Percentage Rate is the Annual Percentage charged for a year for a given sum.
Explanation:
1. Given: Josephine signed up for Platinum card with 0% APR.
Option A: APR- 15.24 to 23.24% in 6 months (makes on time payments)
Option B: No Interest for 1st Year
Option C: All Purchase free for 6 months
Option D: All Purchase free.
2. Find: Which option is correct
3. Solution: Since APR is charged annually, the percentage charged will be every year and given that it is 0%, so, APR charged annually will be 0 annually. Therefore Josephine won't have to pay any interest for the year. Hence all her purchase for the year will be free. Assuming that the time frame for 0% APR is for 1 year only, therefore all her purchases will be interest free for 1 year.
Final Answer: Option B is correct.
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