Question

score <500 501-650 651-750 751-850 rate (apr) 15.75% 12.5% 9.25% 5.75% use the table to answer the question. you have two credit cards. one has a balance of $1,675.00 at a 9.75% apr and the other has a balance of $2,378.00 and is dependent upon your credit score. your score is 650. how much interest is accrued in the first month? (1 point) $38.38 $44.82 $31.94 $25.01

Explanation:

Step1: Determine APR for second card

Credit score is 650, so from table, score 501 - 650 has APR 12.5%.

Step2: Calculate interest for first card

Interest formula: $I = P \times r \times t$, $t = \frac{1}{12}$ (monthly).
First card: $P = 1675$, $r = 9.75\% = 0.0975$.
$I_1 = 1675 \times 0.0975 \times \frac{1}{12} = \frac{1675 \times 0.0975}{12} \approx 13.67$.

Step3: Calculate interest for second card

Second card: $P = 2378$, $r = 12.5\% = 0.125$.
$I_2 = 2378 \times 0.125 \times \frac{1}{12} = \frac{2378 \times 0.125}{12} \approx 24.71$.

Step4: Total interest

Total $I = I_1 + I_2 \approx 13.67 + 24.71 = 38.38$.

Answer:

$38.38$