Question

You have a balance of $1678.00 on a credit card with a 15.75% APR how much interest is occurred if you pay nothing on the principal after three months?

Answer 1

$66.07.

Step-by-step explanation:

It has been given that you have a balance of $1678.00 on a credit card with a 15.75% APR.

We will use simple interest formula to solve our problem.

`A=p(1+rT)`

A= Amount after T years.

P= Principal amount.

r= Annual interest rate (in decimal form)

T= Time in years.

Let us convert our given interest rate in decimal form.

`15.75%=(15.75)/(100)=0.1575`

Let us convert 3 months in years.

`3\text{ months}=(3)/(12) \text{ year}=0.25 \text{ year}`

Now let us substitute our given values in simple interest formula.

`A=1678(1+(0.1575* 0.25))`

`A=1678(1+0.039375)`

`A=1678(1.039375)`

`A=1744.07125`

To find the amount of interest we will subtract our principal amount from 1744.07125.

`\text{Amount of interest after 3 months}=1744.07125-1678`

`\text{Amount of interest after 3 months}=66.07125\approx 66.07`

Therefore, the amount of interest after 3 months will be $66.07.