Question

Esteban's credit card issuing bank charges him an APR of 16% on new purchases, and 24% on

cash advances. What would the bank charge Esteban monthly in finance charges for a $700 cash
advance?

Answer 1

Answer: $14

Explanation:

Hi, to answer this question we have to multiply the amount of the cash advance (700) by the APR for cash advances in decimal form (divided by 100):

700 x (24/100) = $168 (a year)

To obtain the monthly charges, we have to divide the result by the number of months in a year (12):

168 /12 = $14

Feel free to ask for more if needed or if you did not understand something.