How much interest would be paid on a credit card at the end of the second 30-day month on a one-year $1,000 loan at a 12.99% ann

Question

3 years ago

6

ual rate? Assume you pay nothing at the end of the first 30-day month.
a. $109.10
b. $10.92
c. $108.10
d. $10.91
e. $10.80

1 answer:

astra-53 [7] · Answer 1 · 2022-12-17T01:11:39+03:00

The amount of interest that would be paid on a credit card at the end of the second 30-day month is equal to: E. $10.80.

Given the following data:

Conversion:

365 days = 1 year

30 days = X year

Cross-multiplying, we have:

$365X = 30\\\\X=\frac{30}{365}$

X = 0.08219 year

To determine the amount of interest that would be paid on a credit card at the end of the second 30-day month:

First of all, we would calculate the simple interest for the first 30-day month:

Mathematically, simple interest is given by the formula:

$S.I = \frac{PRT}{100}$

Where:

Substituting the given parameters into the formula, we have;

$S.I = \frac{1000 \times 12.99 \times 0.08219}{100}\\\\S.I = \frac{1067.648}{100}$

Simple interest = $10.6765

$S.I = 1000 + 10.6765$

S.I = $1010.6765.

Now, we can determine the amount of interest that would be paid on a credit card at the end of the second 30-day month:

$S.I_2 = \frac{1010.6765 \times 12.99 \times 0.08219}{100}\\\\S.I_2 = \frac{1079.05}{100}$

Interest = 10.79 ≈ $10.80.