Question

If the typical balance on Lucy's credit card is $750 and the interest rate (APR) on her credit card is 16%, how much in interest would you expect Lucy to be charged in a typical month?

Answer 1

Lucy would be charged $10 interest in a typical month.

Further Explanation:

Annual Percentage Rate (APR):  The annual percentage rate is the rate of the fee charged on the credit card. It remains the same even in the case of the failure in the credit card payment. The credit card that has the lowest APR should be preferred.

Calculate the interest for a typical month:

APR rate is calculated for an annual basis. The current APR rate is 16% annually. So, it should be divided by 12 months to calculate the interest for a typical month. The calculation of the interest is as follows:

$\begin{gathered} {\text{Monthly Interest = }}\frac{{{\text{Total Annual Interest}}}}{{12}} \\ = {\text{ }}\frac{{\ 120}}{{12}} \\ = {\text{ \ 10 per month}} \\ \end{gathered}$

Thus, Lucy would be charged $10 interest in a typical month.

Working note:

Calculate the annual interest:

$\begin{gathered} {\text{Total Annual Interest = Credit card balance }} \times {\text{ APR}} \\ {\text{ = \ 750 }} \times {\text{ 16\% }} \\ {\text{ = \ 120}} \\ \end{gathered}$

Thus, the annual interest is $120.

Learn more:

Learn more about the money owed to the credit card company

brainly.com/question/8750254

Learn more about the common credit card fee

brainly.com/question/1124275

Learn more about making on-time minimum payment of credit card

brainly.com/question/6453895

Answer details:

Grade: Senior School

Subject: Business Studies

Chapter: Money & Banking

Keywords: Credit card balance, credit card, $750, interest rate, interest, APR, Annual percentage rate, expect, Lucy, charged, typical month, credit score, would, you, typical balance, expenses.

Answer 2

If the typical balance on Lucy's credit card is $750 and the interest rate (APR) on her credit card is 16%, how much in interest would you expect Lucy to be charged in a typical month

(16%/12)750=10.00