Question

You make a purchase of $1,987.54 using a rewards credit card that gives you 2% cash back. If the credit card has a 17.75% APR and you do not make a payment the first month, how much is the difference between the first month's interest and the reward?

A.$28.81

B.$29.40

C.$19.48

D.$10.35

Answer 1

$10.35 is the answer

Answer 2

Answer: Option 'D' is correct.

Explanation:

Since we have given that

Amount he make for a purchase = $1987.54

Cash back = 2%

Amount of cash back is given by

`(2)/(100)* 1987.54\\\\=\$39.75`

Rate of interest = 17.75%

Interest of first month will be

`Interest=(P* R* T)/(100)\\\\Interest=(1987.54* 17.75* 1)/(100* 12)\\\\Interest=\$29.39`

So, Difference between the first month's interest and the reward is given by

`39.75-29.39\\\\=\$10.35`

Hence, Option 'D' is correct.