Question

A consumer charges a $2,530.16 purchase on their credit card. The card has a daily interest rate of 0.042%. If the consumer pays off the balance at the end of 30 days, how much more in interest will they pay for the purchase?

Answer 1

Answer:

Amount debited through credit card = $ 2,530.16=P

Daily interest rate =0.042%=R

On first day total amount paid=

$P(1+\frac{R}{100})$

On Second day, amount equals to

$P(1+\frac{R}{100})^2$

Amount Charged at the end of 30 days is given by    

    $P(1+\frac{R}{100})^{30}$

$=2530.16\times[1+\frac{0.0042}{100}]^{30}\\\\= 2530.16 \times(1.00042)^{30}\\\\=2530.16\times 1.01267703\\\\=2562.2349$

So, total interest paid after 30 days =2562.24-2530.16

             =Rs 32.08(approx)