Nadia uses a credit card with a 17.8% APR, compounded monthly, to pay for a hotel stay totaling $613.47. She can pay $250 per month on the card. What will the total cost of this purchase be?

Question

lukecrayonz · Answer

$722.67

 $613.47

 $743.47

 $630.00

lukecrayonz · Answer

@ganeshie8 is this one D or A?

lukecrayonz · Answer

The compounded monthly is throwing me off

ganeshie8 · Answer

250 + 250 + 130 http://www.wolframalpha.com/input/?i=%28%28613.47%281%2B.178%2F12%29+-250%29%281%2B.178%2F12%29-250%29%281%2B.178%2F12%29 see if u can understand my calc

ganeshie8 · Answer

compounding monthly means, they calculate interest  on outstanding balance every month

here the interest rate is 17.8%, thats for 1 year. so for every month they calculate interest of 17.8/12 %, and update outstanding balance.

lukecrayonz · Answer

o.O I guess it makes sense.

ganeshie8 · Answer

great :)