Amount used from credit card = $1900
Rate of interest for 12 months = 30%
a- What percentage will be charged each month?
He will be charged [tex]\frac{30}{12}=2.5[/tex] % every month.
b- ) What will be the interest charge for the first month?
[tex]interest=\frac{p*r*t}{100}[/tex]
=[tex]\frac{1900*30*1}{100*12}[/tex] (1 month is taken as [tex]\frac{1}{12}[/tex] )
$47.50
He will be charged $47.50 in interest for the first month.
c) What is his balance after making a $100 payment?
Let us assume that Billy paid $100 after 1st month. So after 1st month the amount due is 1900+47.5= $1947.50
Billy paid $100 from 1947.50, so balance remains = 1947.50-100= $1847.50
d) What is the interest charge for the second month?
Now interest charge will be calculated on 1847.50
interest =[tex]\frac{1847.50*30*1}{100*12}[/tex]
= $ 26.39 or rounding it off we get $26.40.
