Question

find the monthly interest payment in the situation described below. assume that the monthly interest rate is 1/12 of the annual interest rate.

you maintain an average balance of \\$900 on your credit card, which carries a 12\\% annual interest rate.

the monthly interest payment is \\$ \square.
(type an integer or a decimal.)

Explanation:

Identify given values

We are given:

• Average balance: \(B = \$900\)
• Annual interest rate: \(r_{\text{annual}} = 12\% = 0.12\)
• Monthly interest rate is \(\frac{1}{12}\) of the annual rate.

Calculate monthly interest rate

Using the Percentage Calculation knowledge point:

$$ r_{\text{monthly}} = \frac{r_{\text{annual}}}{12} = \frac{12\%}{12} = 1\% = 0.01 $$

Calculate monthly interest payment

Using the Percentage Calculation knowledge point:

$$ I_{\text{monthly}} = B \times r_{\text{monthly}} = 900 \times 0.01 = 9 $$

Answer:

Find the monthly interest payment in the situation described below. Assume that the monthly interest rate is 1/12 of the annual interest rate.

You maintain an average balance of $900 on your credit card, which carries a 12% annual interest rate.

The monthly interest payment is $<blank>9</blank>.
(Type an integer or a decimal.)