Question

A person presently owes $5,000 on a credit card bill. As a penalty, he/she has to pay a uniform amount of $700 per month for a year. The rate of return per month that the credit card company make in a year is closest to: g

Answer 1

Answer:

The company get $283.33 return per month

Explanation:

Given that the person is to pay $700 per month for one year

Hence after one year elapse he will pay a total of

$700*12= $8,400

The returns the credit card company will get after one year is

yearly return= $8,400-$5,000= $3,400.

The rate of return per month= $3,400/12= $283.33.