Question

if a musician uses his credit card to pay for a new violin that costs $2,900 and does not pay on it until the second month, what will the 3.35% monthly interest charge be at the end of the first month? show your work or explain how you got your answer. (4 points)

Explanation:

Step1: Recall simple interest formula

The formula for simple interest is \( I = P \times r \times t \), where \( I \) is the interest, \( P \) is the principal amount, \( r \) is the monthly interest rate (in decimal), and \( t \) is the time in months. Here, \( t = 1 \) month.

Step2: Convert percentage to decimal

The monthly interest rate \( r = 3.35\% = \frac{3.35}{100} = 0.0335 \).

Step3: Substitute values into formula

Given \( P = \$2900 \), \( r = 0.0335 \), and \( t = 1 \). So, \( I = 2900 \times 0.0335 \times 1 \).

Step4: Calculate the interest

\( 2900 \times 0.0335 = 97.15 \).

Answer:

The monthly interest charge at the end of the first month will be \(\$97.15\).