Question

caitlyn has a credit card with a spending limit of $1500 and an apr (annual percentage rate) of 18%. during the first month, caitlyn charged $375 and paid $250 of that in her billing cycle. which expression will find the amount of interest caitlyn will be charged after the first month?
o (0.18)($250)
o (0.18)($375)
o (0.015)($375)
o (0.015)($125)

Explanation:

Step1: Calculate monthly interest rate

The annual percentage rate (APR) is 18%. To find the monthly interest rate $r$, we divide the APR by 12. So $r=\frac{18\%}{12}= 0.015$.

Step2: Calculate the balance on which interest is charged

Caitlyn charged $375$ and paid $250$. The balance $B$ on which interest is charged is $B = 375 - 250=125$.

Step3: Calculate the interest

The interest $I$ is calculated by multiplying the balance $B$ by the monthly - interest rate $r$. So $I=r\times B=(0.015)\times(125)$.

Answer:

$(0.015)(125)$