Question

Marty uses a credit card for only necessary purchases. The interest rate charged by the credit card company is 19.9%. If he maintains an average balance of $3,500 owed on the card, how much will he have paid in interest after one year?

Answer 1

`$696.5`

Explanation:

Interest rates are expressed in amount per year, so Marty will pay `19.9%` per year. If he maintains an average balance of `$3,500`, after one year he will have paid `19.9%` of that amount. So, the interest he paid will be
`(19.9%)*($3,500)`, or `$696.5`