Question

I need help with this question /:

31. Your parents make a purchase of $2,975.34 using a popular reward credit card that gives you 1% cash back. If the credit card has a 13.5% APR and you do not make a payment the first month, how much is the difference between the interest and reward?
$29.75
$371.92
$3.72
$33.47

Answer 1

The answer is $371.92

Explanation:

Purchase has been made of = $2975.34

The cash back is 1% or 0.01*2975.34 = $29.75

The APR of the credit card = 13.5% ; the value is 0.135*2975.34 = $401.67

So, difference between both the interest and reward is =

401.67 -29.75 = $371.92

Hence, option B is correct.