Problema Solution
f. Credit card interest-A bank credit card charges interest at the rate of 21% per year, compounded monthly. If a senior in college charges her last tuition bill $1,500 and intends to pay it in one year, what will she have to pay?
Answer provided by our tutors
Formula for calculating compound interest:
Where,
A = final amount
P = principal amount (initial investment)
r = annual nominal interest rate (as a decimal)
n = number of times the interest is compounded per year
t = number of years
So, A = 1500(1+0.21/12)12 = $ 1847.16