Medal for helping!!! After how many months will Rita pay one hundred dollars in simple annual interest on a credit card that charges twelve percent on her five hundred dollars balance?
A. 2 months

B. 4 months

C. fourteen months

D. twenty months

Question

Medal for helping!!! After how many months will Rita pay one hundred dollars in simple annual interest on a credit card that charges twelve percent on her five hundred dollars balance?
A. 2 months

B. 4 months

C. fourteen months

D. twenty months

mathmale · Answer

Let's concentrate on HOW we calculate the length of time involved.
The formula for simple interest is i = p*r*t, where p is the principal, r the interest rate (as a decimal fraction), and t is the time (in years).
We want t, so why not solve i = p*r*t for t?  Then substitute p=$500, i=$100, r=.12 and calculate t.  That will be n years.  Convert that to months.

anonymous · Answer

Genius!

anonymous · Answer

It gives me 6000

mathmale · Answer

Dear CashBoy, please try calculating t again:  t = i/(pr).  6000 months would be 500 years, and you know that's not the correct answer.

anonymous · Answer

True

mathmale · Answer

So, CashBoy, t = i/(pr) becomes t = ($100)/($500*0.12) = ?    (in years).  Convert this reslt to the number of months.