Question

Jack signs up for a credit card that has a APR of 13.99%. Use the periodic (monthly) interest rate to calculate how much interest he owes on his unpaid February balance of $345.67?

Answer 1

$3.46

Explanation:

Unpaid February balance = $345.67

Annual Percentage Rate(APR) = 13.99 %

=
`(13.99)/(100)`

= 0.1399 (converted into decimal)

Periodic (monthly) interest rate =
`(0.1399)/(12)` (since there are 12 months in a year)

= 0.01

Interest he owes on his unpaid February balance of $345.67

= Periodic (monthly) interest rate * unpaid February balance

= 0.01 * 345.67

= 3.456

= $3.46 (rounded off to the hundredth place)