Question

Luis' credit card statement showed the formula for the amount owed, A(x), on his account after x months as A(x) = P(1.125)*, with the amount, P, that Luis has borrowed on his credit card account. If Luis borrowed $470.00 on his credit card, what will he owe if he waits 2 months to pay the total amount?

Answer 1

To calculate the amount Luis will owe after 2 months, we use the formula A(x) = P(1.125)^x. Plugging in the values, we find Luis will owe $595.09 if he does not pay off the $470.00 he borrowed within 2 months.

Step-by-step explanation:

The student's question is about calculating the amount owed on a credit card after a certain period based on the interest applied. If Luis borrowed $470.00 on his credit card, which has a formula for the amount owed after x months as A(x) = P(1.125)x, then to find out what he will owe after 2 months, we can plug in the values into the formula.

So the calculation will be: A(2) = 470(1.125)2

Step 1: Calculate the compound interest factor for 2 months. This is 1.1252.

Step 2: Multiply the principal amount by this factor: 470 * 1.1252.

Step 3: The resulting product is the total amount Luis will owe after 2 months which is A(2) = 470 * 1.1252 = 470 * 1.265625 = $595.09.

Hence, Luis will owe $595.09 if he waits 2 months to pay the total amount.