Question

Michelle's credit card has a 1% introductory APR for 12 months and after that a 19.9% APR for purchases. Michelle makes purchases of $150 and plans to pay off her total balance before the grace period ends. Her card has a late fee of $35 and an annual membership fee of $0. How much will Michelle pay to have a $0 balance on her credit card?

Answer 1

There is a lot of unnecessary information here made to trip you up.

1% of $150 is $1,50. If we add that to her purchase, we get $151.50

Provided she pays during the grace period, she should only have to pay $151.50

Answer 2

Her total balance of credit card $151.50

Explanation:

Michelle's credit card has a 1% introductory APR for 12 months. After that APR would be 19.9%.

Michelle makes purchases of $150.00 and she wants to pay off her balance before the grace period, so her total balance of the card is

( 1% of 150.00 ) + 150.00 = 01.50 + 150.00 = $151.50

She plans to pay off her total balance before the grace period ends,

Therefore she is eligible for only 1% APR

there would be No late fees, No annual membership, added to her balance.