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Title: You owe 900 dollars on your credit card. You do not pay your credit card for a f Post by: supermario on Jul 15, 2013 You owe 900 dollars on your credit card. You do not pay your credit card for a full year. The interest rate is 21% per year, compounded daily.
a) What is the total amount owed? b) How much of that is interest fees? Title: Re: You owe 900 dollars on your credit card. You do not pay your credit card for a f Post by: goji.go on Jul 15, 2013 You owe 900 dollars on your credit card. You do not pay your credit card for a full year. The interest rate is 21% per year, compounded daily. a) What is the total amount owed? b) How much of that is interest fees? You need to use A = P(1 + i)^n P is 900, i is 0.21 divided by 365 (because compounded daily). n is 365 (which represents the number of compounding periods) A is the amount, which is what we're looking for. A = 900(1 + (0.21/365))^365 = 1110.24 Therefore, you owe 1110.24, (1110.24 - 900 = 210.24 of which is interest (this answers part b)). ;) Title: Re: You owe 900 dollars on your credit card. You do not pay your credit card for a f Post by: supermario on Jul 15, 2013 Thanks man :)
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