Question

Emma notices that since her credit card balance compounds monthly, she is charged more than 15% of her initial loan
amount in interest each year. She wants to know how much she would pay if the card were compounded annually at a
rate of 15%. Which expression could Emma use to evaluate her balance with an annual compounding interest rate?

300(1.015)^12t
300(1.0125)^t
300(1.15)^t
300(1.15)^12t

Answer 1

I believe the best answer out of the options would be:

300(1.15)^t

The formula for compounding interest rates is

A = P(1 + r/n)^nt

I really hope this helped. Let me know if it did!