Question

Use the following compound interest formula to complete the problem. 2007-11-01-00-00_files/i0120000.jpg Rodney owes $1,541.05 on his credit card. His card has an APR of 16.29%, compounded monthly. Assuming that he makes no payments and no purchases, how much will he owe after one year? a. $1,561.97 b. $1,811.70 c. $1,792.09 d. $1,541.05

Answer 1

your answer is B.

Explanation:

took practice test

Answer 2

The correct answer is B. $1811.70

Explanation:

The formula for the compound interest is given by :

`\text{Compound Interest = }Principal* (1+(Rate)/(100* n))^(n* time)`

Principal value = $1541.05

Rate = 16.29%

n = No. of times the interest is compounded in a year

⇒ n = 12

Time = 1 year

`\implies\text{Compound Interest = }1541.05* (1+(16.29)/(100* 12))^(12* 1)\\\\\implies\text{Compound Interest = }1541.05* 1.17563\\\\\implies\bf\textbf{Compound Interest = }\$1811.70`

Hence, The correct answer is B. $1811.70