Question

3. If the typical balance on Lucy's credit card is $750 and the interest rate (APR) on her credit card is 16%, how much in interest would you expect Lucy to be charged in a typical month?

Answer 1

Lucy will be charged about $10.00

Answer 2

$10

Step-by-step explanation

Issuer of credit cards will charge interest when a person carries a balance beyond the grace period. Every month were a person fails to pay the balance in full, finance charge is added to the balance. In this case, the interest will be;

(16/100)× $750×1/12 =$10