Question

Alana saved $1,200.00 to buy a pool table, but decided instead to charge it to her credit card. If the credit card had an interest rate of 12.7% for 6 months with no other fees, and she made no other purchases, what was her cost of credit of using the credit card instead of paying cash?

The cost of credit is the amount that a person pays over and above the amount borrowed.


P is the principal, r is the interest rate,
m is the number of monthly payments,
M is the monthly payment

A.$207.47
B.$84.12
C.$1,407.47
D.$44.82

Answer 1

@jim_thompson5910 @dan815 @EclipsedStar@dtan5457 @amistre64

Answer 2

are you able to calculate the monthly payment M?

Answer 3

i dont know how

Answer 4

\[\Large M = \frac{P(r/12)}{1-(1+r/12)^{-m}}\]

\[\Large M = \frac{1200(0.127/12)}{1-(1+0.127/12)^{-6}}\]

\[\Large M = ???\]

Answer 5

on the bottom line is it 12*12*12*12*12*12?

Answer 6

what do you mean?

Answer 7

oh i see

Answer 8

what kind of calculator do you have?

Answer 9

the one on my computer

Answer 10

ok use this calculator

http://web2.0calc.com/

it's much better

you will type in "( 1200*(0.127/12) )/( 1 - (1+0.127/12)^(-6)) " without quotes like you see on the attachment I'm posting

Answer 11

i got 207.473

Answer 12

is that the answer?

Answer 13

very good

Answer 14

round that to the nearest penny to get $207.47

Answer 15

So Alana pays $207.47 per month for 6 months. How much total has she paid back?

Answer 16

do i divide it?

Answer 17

no

Answer 18

similar example:

monthly payment = $10
number of months = 5

total = (monthly payment) * (number of months) = 10*5 = 50

Answer 19

oooh okay

Answer 20

thanks for helping me

Answer 21

what total did you get?

Answer 22

44.something

Answer 23

oh as your final answer?

Answer 24

...yeah :)

Answer 25

it's correct

Answer 26

thanks!

Answer 27

np