Question

If a mechanic uses his credit card to pay for a compressor that costs $477.95 and does not pay on it until the second month, what will the 1.5% monthly interest charge be at the end of the first month?

A. $7.17
B. $12.83
C. $15.43
D. $22.06

Answer 1

Answer: A. $7.17

Explanation:

Given: The cost of compressor P= $477.95

The monthly interest rate = 1.5 %

In decimal, the monthly interest rate r=0.015

Now, The charge be at the end of the first month is given by:-

`I=Pr\\\Rightarrow\ I=477.95*477.95\\\Rightarrow\ I=7.16925\approx7.17`

Hence, the charge be at the end of the first month is $7.17.