Question

Looking for some furniture for her new apartment, Susan visits the local swap meet in search of something cheap. Knowing that most swap meet vendors will not accept credit cards and that she will not have any money until her next payday, Susan decides to take out a $200 cash advance on her credit card at an interest rate of 32%. If Susan had no previous balance on her credit card, and she manages to pay off the balance within 1 month, how much will she have to pay in interest? a. $5. 33 b. $32. 00 c. $173. 33 d. $205. 33 Please select the best answer from the choices provided. A B C D.

Answer 1

The amount that Susan will have to pay in interest is given by: Option A: $5.33 approx.

How to find the percentage from the total value?

Suppose the value of which a thing is expressed in percentage is "a'

Suppose the percent that considered thing is of "a" is b%

Then since percent shows per 100 (since cent means 100), thus we will first divide the whole part in 100 parts and then we multiply it with b so that we collect b items per 100 items(that is exactly what b per cent means).

Thus, that thing in number is

$\dfrac{a}{100} \times b$

For this case, we're given that:

• Amonut Susan took out = $200
• Interest rate = 32% annually (interest rates are usually expressed in annual (yearly) terms).
• Amount paid off within 1 month

The interest was 32% annually, so in monthly terms, it would be 32/12 = 2.667% approx. (as there are 12 months in each year)

Since the balance was paid within one month, the interest would be simply 1 time calculated on the main balance.

Thus, we get:
Interest amount ≈ 2.667% of $200 = $\dfrac{200}{100} \times 2.667 = 5.334 \approx 5.33 \: \rm (in \: dollars)$

Thus, the amount that Susan will have to pay in interest is given by: Option A: $5.33 approx.

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