1. Who pays the transaction cost (the fee to the bank and network for the use...

1. Who pays the transaction cost (the fee to the bank and network for the use of the card) of a debit card purchase?

A.The Government B. Mastercard C.The Bank D.Vendor (The store where the transaction takes place)

2. Given the same nominal rate, what compounding term will give you the highest effective rate (APY)

A.Monthly B. Annually C.Quarterly D.Daily

3.When you want to compare the best option for the total cost of your loan, you should always ask for

A,Nominal Rate B. APR C. Variable Interest Rate D. Fixed Interest Rate

Solutions

Expert Solution

Answer 1:

Correct answer is:

D. Vendor (The store where the transaction takes place)

Explanation:

In typical debit card transaction, the transaction cost (the fee to the bank and network for the use of the card) is paid/borne by vendor (The store where the transaction takes place).

As such option D is correct and other options A, B and C are incorrect.

Answer 2:

Correct answer is:

D. Daily

Explanation:

Given nominal rate, higher the number of compounding periods higher is the effective rate. Hence from the given options, daily compounding term will give the highest effective rate (APY).

As such option D is correct and other options A, B and C are incorrect.

Answer 3:

Correct answer is:

B. APR

Explanation:

In addition to interest rate, APR includes all fees. As such APR is always higher than nominal rate. Hence to compare the best option for the total cost of loan, one should always ask for APR.

As such option B is correct and other options A, C and D are incorrect.

jeff jeffy answered 1 year ago

Next > < Previous

Related Solutions

1. What is not a cost of keeping money in a checking account? A) Transaction fee...

1. What is not a cost of keeping money in a checking account? A) Transaction fee for ATM transaction B) Fees for various services like stop payments C) Minimum balance requirement for free checking D) FDIC insurance 2. You have estimated that you need $6,500 in liquid assets for an emergency fund. You currently have only $1,000, which is invested in a savings account earning 3percent nominal interest, compounded monthly. Your current budget leaves $290per month to apply to this...

A ________ is a sales transaction arranged by the seller to benefit a buyer who pays...

A ________ is a sales transaction arranged by the seller to benefit a buyer who pays an unreasonably low price for the item sold. QUESTION 1 A ________ is a sales transaction arranged by the seller to benefit a buyer who pays an unreasonably low price for the item sold. Fraud in the inducement. Blue Sky transfer. Sale under duress. Sham sale. QUESTION 2 ________ of a security interest provides protection to secured parties from third parties who may later...

1. bank says that omitting the annual credit card fee for customers who charge at least...

1. bank says that omitting the annual credit card fee for customers who charge at least $2500 in a year will lead to increase in the amount charged on its credit card. The bank does this offer to a random sample of 225 of its credit card customers. It then looks at the difference on how much these customers charge this year with the amount that they charged previous year. The mean increase in the sample is $560, with sum...

What is the meaning of cost of equtiy ? Who pays this cost of equity and...

What is the meaning of cost of equtiy ? Who pays this cost of equity and to whom? How do you calculate the cost of equity

What is the meaning of cost of equity? Who pays this cost of equity and to...

What is the meaning of cost of equity? Who pays this cost of equity and to whom? How do you calculate the cost of equity?

Cost Plus Incentive Fee Calculation. In this cost plus incentive fee contract, the cost is estimated at $210,000 and the fee at $25,000.

Cost Plus Incentive Fee Calculation. In this cost plus incentive fee contract, the cost is estimated at $210,000 and the fee at $25,000. The project is complete, and the buyer has agreed that the costs were, in fact, $200,000. Because the seller's costs came in lower than the estimated costs, the seller shares in the savings: 80% to the buyer and 20% to the seller. Calculate the final fee and final price.The answer is :Fee $27,000Price: $227,000

A bank wonders whether omitting the annual credit card fee for customers who charge at leats...

A bank wonders whether omitting the annual credit card fee for customers who charge at leats $2500 in a year will increase the amount charged on its credit cards. The bank makes this offer to an SRS of 200 of its credit card customers. It then compares how much these customers charge this year with the amount that they charged last year. The mean increase in the sample is $346, and the standard deviation is $112. Give a 99% confidence...

1) Fixed Price Incentive Fee Calculation. In this fixed price incentive fee contract, the target cost is estimated at $9,000,000 and the target fee is $850,000.

1) Fixed Price Incentive Fee Calculation. In this fixed price incentive fee contract, the target cost is estimated at $9,000,000 and the target fee is $850,000. The project is over, and the buyer has that the costs were, in fact, $8,000,000. Because the seller's cost came in lower than the estimated costs, the seller shares in the savings: 70% to the buyer and 30% to the seller. The ceiling price is $12,500,000. Calculate the final fee and final priceFee $1,150,000...

What is a government price floor? Who benefits from the floor? Who pays the cost of...

What is a government price floor? Who benefits from the floor? Who pays the cost of the floor?

Advisor 1 Advisor 2 Advisor 3 Commission Fee Fee + Commission 4% initial cost to purchase...

Advisor 1 Advisor 2 Advisor 3 Commission Fee Fee + Commission 4% initial cost to purchase investments 1% annual fee of asset under management $7,500 first year planning fee Annual management fee beginning in second year 2% cost to purchase investments 0.5% Annual Management Fee beginning in second year 0.10% Annual management fee beginning in second year 8.50% 8.0% 7.50% Compensation Method QuotedCosts Average historical rate of return on similar accounts Instructions Use this information to answer the following questions....

Subjects