Question

Aaron made a $400 purchase using his credit card. The credit card has a simple interest rate of 12% each year. How much will Aaron owe in total at the end of the year?

Answer 1

Answer: 448 dollars

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Work Shown:

P = 400 is the balance

r = 0.12 is the decimal form of the interest rate

t = 1 is the number of years

Use those values to get the simple interest to be

i = P*r*t

i = 400*0.12*1

i = 48

The amount of interest charged is $48

Add this onto the balance of 400 dollars and the total amount Aaron owes is P+i = 400+48 = 448 dollars.