Question

the value of buying insurance for a cell phone is to (1 point)
○ permit an upgrade to a newer model cell phone
○ be able to replace the cell phone if it is lost or stolen
○ lower the cost of roaming charges on the cell phone
○ be able to charge the cell phone service provider.

if a person has to pay $35 a year on each $100 borrowed, the cost in interest is (1 point)
○ better than the average debit card fee
○ worse than our us trade deficit
○ low
○ high

when a person wins $5,000 in the lottery, the person will

Explanation:

First Question (Cell Phone Insurance)

• Insurance for a cell phone typically covers loss, theft, or damage, allowing replacement. Upgrading isn't an insurance benefit, roaming charges are service - related, and charging the provider isn't a standard insurance purpose.

Step1: Calculate the interest rate

The interest paid is $35 per year for each $100 borrowed. The interest rate $r$ is calculated as $r=\frac{35}{100}\times100\% = 35\%$.

Step2: Evaluate the interest rate

Typical interest rates for loans (e.g., personal loans, credit cards) are often lower than 35% (many personal loans are in the single - digit to low double - digit range, credit cards may have higher rates but 35% is relatively high). Debit card fees are not interest - related, and the US trade deficit is an economic measure not comparable in this way. So a 35% interest rate is high.

Answer:

B. be able to replace the cell phone if it is lost or stolen

Second Question (Interest Cost)