Credit card interest A bank credit card charges interest at the rate of 21% per year, compounded monthly. If a senior in college charges $1500 to pay for college expenses and intends to pay it in one year, what will he have to pay?

BenoguigoliB 2020-12-01 Answered
Credit card interest A bank credit card charges interest at the rate of 21% per year, compounded monthly. If a senior in college charges $1500 to pay for college expenses and intends to pay it in one year, what will he have to pay?
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dieseisB
Answered 2020-12-02 Author has 85 answers
If P dollars are deposited in an account earning interest at an annual rate r, compounded n times each year, the amount A in the account after t years is given by
A=P(1+rn)nt
P=%1500
r=21%=0.21
t=1 year
n=12 (Compounded monthly)
Thus,
A=1500(1+0.2112)1(12)
A=1500(1+0.017500000)(12)
A=1500(1.017500000)(12)
A=1500(1.2314)
Use calculator,
A=1847.16
Final statement:
The amount needs to pay is $1847.16.
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Jeffrey Jordon
Answered 2021-11-04 Author has 2087 answers

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