Question

jalen had to pay $2,000 on his credit card for some home repairs, which has an apr of 16%. let n be the average daily balance and o the monthly finance charge. which equation best determines o using the apr? o = 0.16·n·30; o = (0.16/365)·n·30; o = (0.16/12)·n; o = 0.16n

Explanation:

Step1: Recall APR to Monthly Rate

APR (Annual Percentage Rate) is annual, so to get monthly rate, divide by 12. The APR here is 16% (0.16 in decimal). So monthly rate is $\frac{0.16}{12}$.

Step2: Relate to Average Daily Balance

Monthly finance charge \( o \) is monthly rate times average daily balance \( n \). So \( o=\frac{0.16}{12}\cdot n \).

Answer:

\( o = \frac{0.16}{12} \cdot n \) (the third option)