Web Analytics
controlledchaos
Answered

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 ​$850 on your credit​ card, which carries an 18​% annual interest rate.
WHat is the monthly interest payment?

Verified Answer :

redheadangel

Your average monthly interest rate is0.18/12 = 0.015. So your average monthly interest is0.015×$850 = $12.75. Then the annual interest payments would be 12×$12.75 = $153

anthougo

The monthly interest payment is $12.75 based on an average credit card balance of $850 at 18% APR.

What is a monthly interest payment?

The monthly interest payment refers to the portion of the monthly payment that is dedicated to discharging the finance charge.

The monthly interest payment can be computed as follows:

Data and Calculations:

Average card balance = $850

Annual interest rate = 18%

Monthly interest rate = 1.5% (18%/12)

Monthly interest payment = $12.75 ($850 x 1.5%)

Thus, the monthly interest payment is $12.75 based on an average credit card balance of $850 at 18% APR.

Learn more about monthly payments at https://brainly.com/question/25658911