Final answer:
The monthly interest payment on a credit card with a $1020 average balance at a 16% annual interest rate is approximately $13.57, calculated by using the monthly interest rate of 1.33% applied to the balance.
Step-by-step explanation:
To calculate the monthly interest payment on a credit card with an average balance of $1020 and an annual interest rate of 16%, you first need to find the monthly interest rate by dividing the annual rate by 12. The monthly interest rate is therefore 16% / 12 = 1.33%. Applying the monthly interest rate to the average balance, the monthly interest payment would be $1020 * 1.33% = $13.566. Since we need to type an integer or a decimal, we can round this to $13.57.
In general, credit cards are a widespread form of borrowing money. They carry interest rates that can significantly increase the amount of money that consumers need to pay back when they carry a balance. With rates typically ranging from 12% to 18%, those who do not pay off their credit card balances in full can find themselves paying substantial amounts in interest, which contributes to the overall debt levels.