Alana saved $1,200.00 to buy a pool table, but decided instead to charge it to her credit card. If the credit card had an interest rate of 13.5% for 6 months with no other fees, and she made no other purchases, what was her cost of credit of using the credit card instead of paying cash?
The cost of credit is the amount that a person pays over and above the amount borrowed.
P is the principal,
r is the interest rate,
m is the number of monthly payments,
M is the monthly payment