3. How does revolving credit differ from installment credit? 1. Revolving credi allows borrowing and repaying multiple times 2. Revolving credit has a fixed repayment schedule. 3. Revolving credit is used for one-time large purchases. 4. Revolving credit has no interest charges.

The correct answer is **1. Revolving credit allows borrowing and repaying multiple times.**<br /><br />Here's a breakdown of the differences between revolving credit and installment credit:<br /><br />* **Revolving Credit:** Think credit cards. You have a credit limit, and you can borrow and repay repeatedly as long as you stay within that limit. The amount you owe and your minimum payment due change based on your usage.<br /><br />* **Installment Credit:** Think mortgages or auto loans. You borrow a specific amount of money and repay it in fixed installments over a set period. The loan terms, including the repayment schedule and interest rate, are agreed upon upfront.<br /><br /><br />Options 2, 3, and 4 are incorrect:<br /><br />* **2. Revolving credit has a fixed repayment schedule.** Installment credit has a fixed repayment schedule. Revolving credit requires minimum payments, but the total amount and timing of repayment can vary.<br /><br />* **3. Revolving credit is used for one-time large purchases.** While you *can* use revolving credit for large purchases, it's not its primary purpose. Installment credit is typically used for large, one-time purchases.<br /><br />* **4. Revolving credit has no interest charges.** Revolving credit almost always accrues interest if the balance isn't paid in full each month.<br />