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? (3 points)
$37.04
$280.98
$30.73
$194.30

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? (3 points)
 $37.04
 $280.98
 $30.73
 $194.30

Shadow · Answer

If the interest rate is 18.5% and the amount on the card is $1050.25 then we convert the percent to a decimal, 0.185, then multiply it by the amount on the card, $1050.25.

Shadow · Answer

Since this is an annual rate and not a monthly rate, we can ignore the $400 a month. If it were monthly, and she had payed off $400 each month, the amount she would pay would be less, but that's not the case.