Question

(Credit Scores LC)

Review the simple interest rate based on FICO scores to answer the question:


FICO Score Simple Interest Rate
800–850 4.295%
740–799 5.597%
670–739 8.132%
580–669 9.358%
300–579 12.413%


A consumer, with a credit score of 645, is planning to buy a used car and needs to borrow $3,500 with a simple interest rate loan. Determine the interest rate the consumer will qualify for if they raise their credit score 60 points.
4.295%
5.597%
8.132%
9.358%

Answer 1

The new FICO score, which is 745, falls between 740 and 799. The consumer will therefore be eligible for a simple interest rate of 5.597%.

Answer 2

We can see because of the chart, it starts out at 645 which would be 8.132% but we're raising it 60 points which makes it 745, making it fall in the category of 5.597%. Make sense?

Answer 3

i dont really understand this one. can you show the work for it if you dont mind? i understand things better withe xamples

Answer 4

examples

Answer 5

I just gave you the example-

Answer 6

But I guess I can explain it more if needed?

Answer 7

yeah. i meant more. sorry

Answer 8

Okay, so we start at 645 right? And the owner needs to borrow $3,500. So we're looking to see where they'd be at if we raised their score by 60 points. That gives us 745. This raises them into the next category which if you looked at the chart and where the numbers are you would see that 740-799 falls in the category percentage of 5.597% which is your answer.

Answer 9

Wait hold on....did I do my math wrong-

Answer 10

Hold this one might actually be on me

Answer 11

oh, ok

Answer 12

Okay so I might be a little dumb.
645 (current score) + 60 = 705
So if that's 705 we go up and look at the chart. that falls in 670-739 which meanssss your rate should be 8.132% if I'm not mistaken this time.

Answer 13

your defentily not dumb

Answer 14

So really whenever it ask you that say it says the owner starts with 750 credit and it gets raised by 50 it would just be 750 + 50 and then you go to the chart and look where that number falls under and then look at the percentage for that category which will be your answer!

Answer 15

thank you