Question

You take out a cash advance of $2,790.00 on a credit card with a 3.5% cash advance fee and a 13.5% APR. What is the amount due by the end of the month? $2,920.14 $3,277.48 $2,821.39 $2,887.65

Answer 1

Answer:

The answer is $3277.48

Step-by-step explanation:

An Annual Percentage Rate or APR is calculated by taking into account the interest rate on a credit card (or another borrowed sum) and any other charges such as an annual fee or arrangement fee.

So the first step here is to calculate the 3.5% cash advance fee on cash advance of $2790.00.

$2790.00 × 3.5%

2790 × (3.5 ÷ 100)

2790 × 0.035

$97.65

Now APR is calculated on the sum of cash advance and cash advance fee, i.e.,

13.5% × (2790 + 97.65)

13.5% × 2887.65

( 13.5 ÷ 100 ) × 2887.65

0.135 × 2887.65

$389.83

The total amount due at the end of the month is sum of Cash advance, Cash advance fee and APR

$2790 + $97.65 +$389.83 = $3277.48