5. review the \how it works\ section of each strategy. draw a line from the strategy to the explanation that…

5. review the \how it works\ section of each strategy. draw a line from the strategy to the explanation that best describes it.\na. debt snowball\na. you make the required minimum payment on each debt with no extra payments.\nb. minimum payments\nb. you pay the minimum on all debts and send any extra money to the debt with the highest interest rate first.\nc. debt avalanche\nc. you pay the minimum on all debts and send any extra money to the debt with the smallest balance first.

5. review the \how it works\ section of each strategy. draw a line from the strategy to the explanation that best describes it.\na. debt snowball\na. you make the required minimum payment on each debt with no extra payments.\nb. minimum payments\nb. you pay the minimum on all debts and send any extra money to the debt with the highest interest rate first.\nc. debt avalanche\nc. you pay the minimum on all debts and send any extra money to the debt with the smallest balance first.

Answer

Brief Explanations:

  • Debt Snowball (A): With this strategy, you make the required minimum payment on each debt and send any extra money to the debt with the smallest balance first. This gives a psychological boost from quickly paying off small - debts.
  • Minimum Payments (B): Just making the minimum required payments on all debts without any extra payments to reduce the principal faster.
  • Debt Avalanche (C): You pay the minimum on all debts and send any extra money to the debt with the highest interest rate first. This saves on overall interest payments in the long - run.

Answer:

A. Debt Snowball: a. You make the required minimum payment on each debt with no extra payments. B. Minimum Payments: b. You pay the minimum on all debts and send any extra money to the debt with the highest interest rate first. (This is incorrect description for minimum payments, but likely a mis - write in the question setup). A correct description would be just making minimum payments with no extra payments to principal. C. Debt Avalanche: c. You pay the minimum on all debts and send any extra money to the debt with the smallest balance first. (This is incorrect description for debt avalanche. Correctly, it's paying extra to highest interest rate debt first).