Question

A business regularly extends credit to customers for large purchases with a standard interest rate of 5 percent. There is also a $200 installment fee that is added to the total cost of the purchase. A customer applies for credit but has a very low credit score. If the business decides to extend credit, which is most likely?%0D%0A%0D%0A(1 point)%0D%0AResponses%0D%0A%0D%0AThe business will drop the fee to make the loan more affordable.%0D%0A%0D%0AThe business will drop the fee to make the loan more affordable.%0D%0A%0D%0AThe customer will decide to take the loan out from a bank instead.%0D%0A%0D%0AThe customer will decide to take the loan out from a bank instead.%0D%0A%0D%0AThe fees and interest rates will be higher because of the greater risk.%0D%0A%0D%0AThe fees and interest rates will be higher because of the greater risk.%0D%0A%0D%0AThe business is legally obligated to offer this customer its standard rates.

Answer 1

The fees and interest rates will be higher because of the greater risk.