question 1 of 10\nmelody has a credit card that uses the previous balance method. the opening balance of one…

question 1 of 10\nmelody has a credit card that uses the previous balance method. the opening balance of one of her 30 - day billing cycles was $0, but this was her balance for only the first 15 days of the billing cycle. she then made a purchase that increased her balance to $4800, and her balance stayed this amount for the remainder of the billing cycle. if her credit cards apr is 29%, how much was melody charged in interest for the billing cycle?\n\na. $139.20\nb. $114.41\nc. $57.21\nd. $0

question 1 of 10\nmelody has a credit card that uses the previous balance method. the opening balance of one of her 30 - day billing cycles was $0, but this was her balance for only the first 15 days of the billing cycle. she then made a purchase that increased her balance to $4800, and her balance stayed this amount for the remainder of the billing cycle. if her credit cards apr is 29%, how much was melody charged in interest for the billing cycle?\n\na. $139.20\nb. $114.41\nc. $57.21\nd. $0

Answer

Explanation:

Step1: Calculate the monthly interest rate

The APR is 29%, so the monthly interest rate $r=\frac{29%}{12}=\frac{0.29}{12}$.

Step2: Determine the balance for interest - calculation

The previous - balance method uses the balance at the start of the billing cycle. Since the balance for the first 15 days was $0$ and then it became $4800$ and stayed that way for the remainder of the 30 - day cycle, the balance used for interest - calculation is $4800$.

Step3: Calculate the interest

The interest $I$ is calculated using the formula $I = Prt$, where $P$ is the principal (balance), $r$ is the monthly interest rate, and $t = 1$ (since we are calculating for one billing cycle). So $I=4800\times\frac{0.29}{12}\times1$. $I = 4800\times\frac{0.29}{12}=400\times0.29 = 114.4$.

Answer:

B. $114.41$