Samuel has a balance on his credit card of $766. If the APR on the credit card is 20.43% compounded monthly, how much is he charged in interest this month?

Question

anonymous · Answer

$13.04

 $20.43

 $37.49

 $63.83

jim_thompson5910 · Answer

I = Prt

I = 766(0.2043)*(1/12)

I = ???

anonymous · Answer

Thank you!

jim_thompson5910 · Answer

np

anonymous · Answer

So if it was compounded daily, the fraction would be 1/365?

jim_thompson5910 · Answer

yep

anonymous · Answer

For instance, now I have a reverse question.. Sydney possesses a credit card with an APR of 21.34% compounded daily. What is the APY on this credit card?

jim_thompson5910 · Answer

APY = (1 + i/n)^n - 1

APY = (1 + 0.2134/365)^365 - 1

APY = (1 + 0.00058465753424)^365 - 1

APY = (1.00058465753424)^365 - 1

APY = 1.23780251399899 - 1

APY = 0.23780251399899

So APY is roughly 23.78%

jim_thompson5910 · Answer

This is effectively the real yearly interest rate

anonymous · Answer

Okay, I get it. Thank you! I just didnt knwo the formulas

jim_thompson5910 · Answer

neither did I, so I had to look it up I found the formula for APY here http://en.wikipedia.org/wiki/APY

jim_thompson5910 · Answer

it's not too bad of a formula (compared to others)

anonymous · Answer

Yeah pretty simple. Thank you!