7
QuizMultiple Choice

Credit Cards — Quiz

Question 7 • Financial Algebra/Mathematics

Emma makes a purchase of $⁢250 on a credit card with an 18% annual interest rate. If she pays off the purchase in 3.5 months and the card has a 15 -day grace period, what is the total interest paid on her purchase? Formula: total cost=purchase amount+(purchase amount⋅interest rate)

Answer
A
3 point 7 5 dollars
B
11 point 2 5 dollars
C
15 dollars
D
7 point 5 0 dollars

Explanation

The 15-day grace period is about half a month, so interest accrues for about 3 months of the 3.5 months. The interest is $250 × 0.18 × (3 ÷ 12) = $11.25. Therefore, the correct choice is $11.25.

AI-written and checked against the verified answer.

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