Quality Cars, an independent used car dealership, utilizes long-term consumer credit in its business. Typically, consumers are allowed to place a 15 percent down payment on an automobile. Then, over a period of 48 months, the consumer is allowed to make payments on the balance of the account, which includes compound interest of 2 percent monthly on the unpaid portion. Quality Cars is employing _____ in its business.

Question

Quizplus · Accepted Answer

Quality Cars is utilizing installment accounts, which allow consumers to make payments over a set period of time with compound interest included. This is different from revolving charge accounts, where consumers can make continuous purchases and pay off the balance at their own pace. Open charge accounts do not have a set repayment period, and selective accounts is not a recognized term in this context.

Quality Cars, an Independent Used Car Dealership, Utilizes Long-Term Consumer