Question

Jorge's credit card has a beginning balance of $2,200 on August 1. He made no transactions in the month of August, and the minimum payment due is $88 on August 31. The APR is 21%. How much interest will he pay?

A) $0
B) $38.50
C) $38.92
D) $46.20

Answer 1

Jorge will pay $38.50 in interest for the month of August on his credit card with a beginning balance of $2,200 and an APR of 21%.

Step-by-step explanation:

To calculate how much interest Jorge will pay on his credit card with a beginning balance of $2,200 and an APR of 21%, we first need to understand what APR means. APR stands for Annual Percentage Rate, which is the interest rate for a whole year (annualized), rather than just a monthly fee/rate. As Jorge made no transactions in August, and assuming the interest is compounded monthly, the interest for one month would be calculated as follows:
($2,200) × (0.21) / 12 = $38.50

Therefore, Jorge will pay $38.50 in interest for the month of August if he makes the minimum payment due of $88 on August 31.