The monthly interest payment in the situation described is $9.00
What is credit card monthly interest in dollar terms?
The credit card monthly interest cost in dollars is the average balance of the credit card multiplied by the annual interest rate and all multiplied by 1 divided 12, since 1 month interest is just 1 over 12 of the annual interest
In other words, our monthly interest cost can be determined using the formula below:
monthly interest cost= average balance of credit card*annual interest rate*1/12
average balance of the credit card=$720
annual interest rate=15%
monthly interest cost=$720*15%*1/12
monthly interest cost=$9.00
When the average credit card balance of the month is $720, the credit card holder would pay $9.00 in interest over the period of that month
Note that the annual interest payment is time-apportioned by multiplying by 1 divided by 12.
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