Question

You have a balance of $4,500 on your credit card. The interest rate is 12% (1% per month). The late payment fee is $40. You miss a payment. Solve for your fees plus interest for the month.

a) $40
b) $45
c) $65
d) $85

Answer 1

I started by figuring out how much interest you get in a month by multiplying 4500 by .01. This gave me $45 as in interest. Then I added the payment fee, $40. 40+45 is 85, so the answer should be d). However, I'm not 100% positive. Somebody verify please? :)