Question

assume thatvthw monthly interest rate os 1/12 pf rhe annual intwrwst rate. you maintain a balance pf $700 on tour cars which carries an 18% annial intwrest rate. what will monthly interest payment be?

Answer 1

Solution:

Given data,

Balance on credit card = $700

Annual interest rate = 18% and,

The monthly interest rate is 1/12 of the annual interest rate.

From the given data first we calculate monthly interest rate:

The monthly interest rate = 1/12*18%

= 1/12*0.18

= 0.015

= 1.5%

Monthly interest rate = 1.5%

Now,

The monthly interest payment = $700*1.5%

= $10.5

Therefore, The monthly interest payment = $10.5.