find the monthly interest payment in the situation described below. assume that the monthly interest rate is…
find the monthly interest payment in the situation described below. assume that the monthly interest rate is 1/12 of the annual interest rate. you maintain an average balance of $600 on your credit card, which carries an 18% annual interest rate. the monthly interest payment is $ (type an integer or a decimal.)
Answer
Explanation:
Step1: Calculate monthly interest rate
The annual interest rate is 18% or 0.18 in decimal form. The monthly interest rate $r$ is $\frac{0.18}{12}= 0.015$.
Step2: Calculate monthly interest payment
The formula for simple - interest is $I = Prt$, where $P$ is the principal amount, $r$ is the interest rate, and $t$ is the time. Here, $P=$600$, $r = 0.015$, and $t = 1$ (since we are calculating for 1 month). So, $I=600\times0.015=$9$.
Answer:
9