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Suppose you have a credit card debt of $4,000. Last month the bank charged you $40 interest on the debt. The solution to the equation 40= 4000/12r represents the annual interest rate (r) on the credit card. Find the annual interest rate on the credit card.

1 Answer

4 votes

Answer:

12%

Explanation:

As per the given formula:

  • 40= 4000/12r
  • r = 40*12/4000
  • r = 0.12
  • 0.12*100% = 12%

Interest rate is 12%

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