Question

Find the monthly interest payment in the situation described below. Assume that the monthly interest rate is 1/12 of the annual interest rate.You maintain an average balance of $ 600 on your credit card, which carries a 15% annual interest rate.The monthly interest payment is $  (Type an integer or a decimal.)

Answer 1

Given:

The monthly interest rate is 1/12 of the annual interest rate.

An average balance of ​$600 on a credit​ card, carries a ​15% annual interest rate.

To find:

The monthly interest payment.

Step-by-step explanation:

Since the monthly interest rate is 1/12 of the 15% annual interest rate.

So, the monthly interest rate is,

`(1)/(12)*15\%=1.25\%`

So, the monthly interest payment for the average balance of $600 is

`600*(1.25)/(100)=\text{ \$}7.5`

Therefore, the monthly interest payment is $7.5.

Final answer:

The monthly interest payment is $7.5.