Question

Rob maintains an average monthly balance on his credit card of $1,900. His credit card company charges 21% interest annually, which it bills at a rate of 1.75% per month. How much is Rob spending on credit card interest per year?

Answer 1

Rob spends $399 on credit card interest per year.

Step-by-step explanation:

To calculate the annual credit card interest, we need to find the total amount of interest Rob pays in a year. Since the interest is billed at a rate of 1.75% per month, we can calculate the monthly interest paid by multiplying the average monthly balance by 1.75%. For Rob, this would be $1,900 * 0.0175 = $33.25 per month.

To find the annual interest, we multiply the monthly interest by 12: $33.25 * 12 = $399 per year. So, Rob spends $399 on credit card interest per year.

Learn more about credit card interest