Question

Assume the monthly interest rate is 1/12 of the annual interest rate . you maintain an average balance of $450 on your credit card . which carries a 24% annual interest rate .

Question= 1).What is the monthly interest payment .

Answer 1

The monthly interest payment would be $ 9

Explanation:

Given,

The average balance of the credit card = $ 450,

Annual rate of interest = 24%,

∵ Monthly interest rate is 1/12 of the annual interest rate,

Thus, the monthly interest rate =
`(1)/(12)\text{ of }24\%`

`=2\%`

Hence, the monthly interest payment = 2% of credit card balance

= 2% of 450

`=(2* 450)/(100)`

`=(90)/(10)`

= $ 9