Question

Sherri uses her credit card to pay for new transmission that ended up totaling $1,050.25. She can pay off up to $400 a month. The card has an annual rate of 18.5%. How much will she pay in interest?

Answer 1

Sherri uses her credit card to pay for new transmission that ended up totaling $1,050.25. She can pay off up to $400 a month. The card has an annual rate of 18.5%. How much will she pay in interest?

Answer 2

Here's how to find the answer to this one, just did it myself and got the right one(:
First, you need to find how much she will be paying monthly. Take your annual rate (18.5) and divide it by 12, making sure to move the decimal over. .185/12= .0154166667. (I like to keep in all the numbers instead of rounding, to make sure I didn't miss anything.) Now multiply that by the initial price, 1050.25. This equals 16.19135417. Remember this number, you need it later! 16.19135417 is the first months interest. Add it to the initial cost. This equals 1066.441354. It says she can pay $400 a month, so subtract that from that number. (666.4413542). This is her new balance for the next month, so now you multiply this by the interest rate. 666.4413542*.0154166667= 10.27430423. This is the next month's interest. Add it to 666.4413542. (676.7156584) and again, subtract 400 dollars from it. (276.7156584) Multiply this by the interest rate as it the balance for the next month. 276.7156585*.0154166667= 4.266033077. Obviously Sherri can pay off the balance this month. To find the answer to the question though, we must add together the interest rates from each month, 16.19135417,10.27430423, and 4.266033077. This will be your answer. So when we add these three together, we get 30.73169148. or $30.73. I hope this helped!