Question

Judy currently has one credit card. She owes $500 and the credit card has a rate of 15%

per month. How much does Judy owe 8 months from now?

Answer 1

$ 1,100

Explanation:

Well use the simple interest equation;

A = P(1 + rt)

Where:

A = Total Accrued Amount (principal + interest)

P = Principal Amount

I = Interest Amount

r = Rate of Interest per year in decimal; r = R/100

R = Rate of Interest per year as a percent; R = r * 100

t = Time Period involved in months or years

A = 500 (1 + 0.15*8)

A = 500 (2.2)

= 1100