Question

Assume the monthly interest rate is 1/12 of the annual interest rate . you maintain an average balance of $450 on your credit card . which carries a 24% annual interest rate .
Question= 1).What is the monthly interest payment .

Answer 1

Answer:

The monthly interest payment would be $ 9

Step-by-step explanation:

Given,

The average balance of the credit card = $ 450,

Annual rate of interest = 24%,

∵ Monthly interest rate is 1/12 of the annual interest rate,

Thus, the monthly interest rate = $\frac{1}{12}\text{ of }24\%$

$=2\%$

Hence, the monthly interest payment = 2% of credit card balance

= 2% of 450

$=\frac{2\times 450}{100}$

$=\frac{90}{10}$

= $ 9