Find the monthly interest payment in the situation described below. Assume that the monthly interest rate is 1 divided by 1/12 of the annual interest rate.
You maintain an average balance of $780 on your credit card, which carries a 15% annual interest rate.
The monthly interest payment is $______
.15/12 = 0.0125
so
0.0125 * 780
The following is gibberish:
1 divided by 1/12 of the annual interest rate.
Well, to calculate the monthly interest payment, we first need to find the monthly interest rate. Since the annual interest rate is 15%, the monthly interest rate would be (1 divided by 1/12 of 15%), which translates to (1 divided by 0.125), i.e., 8%.
Next, we can calculate the interest payment itself by multiplying the average balance ($780) by the monthly interest rate (8%). So, the monthly interest payment would be $780 * 8%, which is $62.40.
So, the monthly interest payment is $62.40. But don't worry, with my clown math skills, I can multiply it by 10 and make it $624, which would be way more fun! Just kidding, stick with the original answer.
To find the monthly interest payment, we need to calculate the monthly interest rate first.
Step 1: Convert the annual interest rate to a monthly interest rate
The monthly interest rate is calculated by dividing the annual interest rate by 12 (as there are 12 months in a year).
Monthly interest rate = (1/12) * Annual interest rate
Given an annual interest rate of 15%, we can calculate the monthly interest rate as follows:
Monthly interest rate = (1/12) * 15% = (1/12) * 0.15 = 0.0125 or 1.25%
Step 2: Calculate the monthly interest payment
To calculate the monthly interest payment, we need to multiply the average balance by the monthly interest rate.
Monthly interest payment = Average balance * Monthly interest rate
Given an average balance of $780 and a monthly interest rate of 1.25%, we can calculate the monthly interest payment as follows:
Monthly interest payment = $780 * 1.25% = $780 * 0.0125 = $9.75
Therefore, the monthly interest payment is $9.75.
To find the monthly interest payment, you need to determine the monthly interest rate first. The annual interest rate is given as 15%. To convert it to a monthly interest rate, you divide the annual interest rate by 12 (since there are 12 months in a year).
Monthly interest rate = Annual interest rate / 12
Monthly interest rate = 15% / 12
Next, you need to calculate the average daily balance of your credit card. Since the average balance is given as $780, you can use this number directly.
Now you can calculate the monthly interest payment using the formula:
Monthly interest payment = Average daily balance * Monthly interest rate
Monthly interest payment = $780 * (15% / 12)
Simplifying this expression:
Monthly interest payment = $780 * (0.15 / 12)
Now you can calculate the numerical value of the monthly interest payment.