Question

How much interest will you have to pay for a credit card balance of $779 that is 1 month overdue, if a 22% annual rate is charged

Answer 1

The general equation is:

`y=P((r)/(12))^(n\cdot12)`

Where:

n = the count in years

P = sum owed = $779

r = rate = 22% = 0.22

In this case, they are only considering 1 month so:

`\begin{gathered} n*12=1 \\ n*(12)/(12)=(1)/(12) \\ n=(1)/(12) \end{gathered}`

Therefore, substitute the values we have: