Question

Find the monthly interest payment in the situation described below. Assume that the monthly interest rate is 1 divided by 12 of the annual interest rate.
You maintain an average balance of ​$675 on your credit​ card, which carries a 24%
annual interest rate.

The monthly interest payment is ​

Answer 1

The monthly interest payment is 162

What is Interest?

Interest, in its most simple form, is calculated as a percent of the principal.

First,

monthly interest rate,

= 0.24/12

= 0.02.

Now,

Average monthly interest,

=0.02×$675

= $13.50.

Thus, the annual interest payments,

= 12×$13.50

= $162

Learn more about this concept here:

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