Question

Maxine's credit card has an APR of 27.99%. If her current monthly balance, before interest, is $1,834.50, what will her monthly interest charge be? (4 points) $42.78 $42.79 $51.67 $65.54

Answer 1

(b) $42.79

Explanation:

You want the monthly interest charge on a balance of $1834.50 when the annual rate is 27.99%.

Monthly rate

The monthly interest rate is the annual rate divided by 12. This means the interest charge is ...

I = Prt . . . . . interest on P at annual rate r for t years

I = $1834.50 × 0.2799 × 1/12 ≈ $42.79

Her monthly interest charge will be $42.79.