# 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
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
$A=P{\left(1+\frac{r}{n}\right)}^{nt}$
P=%1500
r=21%=0.21
$t=1$ year
$n=12$ (Compounded monthly)
Thus,
$A=1500{\left(1+\frac{0.21}{12}\right)}^{1\left(12\right)}$
$A=1500{\left(1+0.017500000\right)}^{\left(12\right)}$
$A=1500{\left(1.017500000\right)}^{\left(12\right)}$
$A=1500\left(1.2314\right)$
Use calculator,
$A=1847.16$
Final statement:
The amount needs to pay is \$1847.16.
Jeffrey Jordon