Liam purchases a new smartphone for $700 using his credit card, which has an annual interest rate of 18% He plans to pay off the phone over 10 months. The credit card offers a grace period of 25 days. If Liam makes his first payment within the grace period, what is the total cost of the smartphone including interest? Formula: total cost=purchase amount+(purchase amount⋅interest rate)
Using the formula given, the interest is $700 × 0.18 = $126. Add that to the $700 purchase price: $700 + $126 = $826. The total cost is $826, choice C.
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