You get credit card offers of 3%, 1.75%, 4%, 3.75%, 2.85%, 3.58%, and 4.35%. What is the average of these offers?
The correct answer and explanation is:
To calculate the average of the credit card offers, we simply add up all the percentage rates and then divide by the number of offers.
Step-by-step Calculation:
Given credit card offers:
3%, 1.75%, 4%, 3.75%, 2.85%, 3.58%, 4.35%
- Add the percentages together:
3+1.75+4+3.75+2.85+3.58+4.35=23.283 + 1.75 + 4 + 3.75 + 2.85 + 3.58 + 4.35 = 23.28
- Count the number of offers:
There are 7 offers. - Divide the total by the number of offers:
23.287=3.3257≈3.33%\frac{23.28}{7} = 3.3257 \approx 3.33\%
✅ Correct Answer: 3.33%
📘 Explanation (Approx. 300 Words)
To find the average (or mean) of a set of numbers, you add all the values together and divide the sum by the total number of values. In this case, we are working with percentage rates from credit card offers, which often show promotional interest rates.
The percentages provided (3%, 1.75%, 4%, etc.) represent individual promotional rates. To compare or analyze them effectively, such as choosing the best or understanding the market average, calculating the mean helps.
The process begins by adding up all the values: 3+1.75+4+3.75+2.85+3.58+4.35=23.283 + 1.75 + 4 + 3.75 + 2.85 + 3.58 + 4.35 = 23.28
This total reflects the combined interest rates.
Next, we divide this total by the number of values (which is 7): 23.28÷7=3.3257…23.28 ÷ 7 = 3.3257…
This result is approximately 3.33%, which represents the average interest rate across all the offers.
Knowing this average allows you to assess which offers are better or worse than average. For example, offers like 1.75% are below average and might be considered better deals, while 4.35% is above average and may be less attractive.
Thus, understanding how to calculate and interpret averages is valuable for making informed financial decisions, like choosing a credit card with the best rate.