Question

Your parents have a credit card with a balance of $2,748.56. The interest rate is 10.5%
V APR. A late payment fee of $40.00 is added to the principal if they pay after 6/1. They
make a payment for $300.00 on 6/1. How much interest did they pay?
$297.00
$24.40
$24.05
$288.60

Answer 1

Answer:

288.60

Step-by-step explanation:

since they didn't pay after 6/1, you can ignore the fee of $40.

2748.56 * .105 = 288.60

Answer 2

Answer: C) $24.05

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Explanation:

10.5% is the annual interest rate

divide that over 12 to get the monthly rate

(10.5%)/12 = 0.875%

0.875% converts to 0.00875 after moving the decimal point 2 spots to the left.

Multiply this with the balance of 2748.56

2748.56*0.00875 = 24.0499

This rounds to 24.05 dollars.

We do not consider the $40 late fee because they made the payment on 6/1, means they do not get penalized.