Question

kayla used her credit card to purchase a new television for $487.89. she can pay off up to $175 per month. the card has an annual rate of 23.5% compunded monthly. how much will she pay in interest?

Answer 1

@BRACEFACEJAH you are incorrect, the annual interest rate is 23.5% which means that you should be paying 1.958333% in interest per month

Answer 2

Otherwise, the process is correct.

Month 1:
Owed Amount = 487.89
Kayla Pays = 175
Amount Left = 312.89

1.958333% of 312.89 = 6.127
this gets added to the owed amount

Month 2:
Owed Amount = 312.89 + 6.13 = 319.02
Kayla Pays = 175
Amount Left = 144.02

1.958333% of 144.02 = 2.82
this gets added to the owed amount

Month 3:
Owed Amount = 144.02 + 2.82 = 146.84
Kayla Pays = 175
Amount Left = 0

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Amount paid in interest = 6.13 + 2.82