Quality Cars, an independent used-car dealership, utilises long-term consumer credit in its business.Typically, consumers are allowed to place a 15 per cent down payment on a car.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 per cent monthly on the unpaid portion.Quality Cars is employing ____ in its business.

Question

Quizplus · Accepted Answer

Quality Cars is employing instalment accounts in its business as they allow the consumer to make payments on the balance of the account over a fixed period of time with compounded interest. Open charge accounts, revolving accounts, and selective accounts do not involve fixed payment terms and interest rates.

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