27
practice examMultiple Choice

Practice Exam

Question 27 • Advanced Financial Algebra

Jane purchases books for $⁢200 on her credit card, which has a 15% annual interest rate. If she pays off the purchase in 4 months, assuming no grace period, how much total interest will she pay? Formula: total cost=purchase amount+(purchase amount⋅interest rate)

Answer
A
10 dollars
B
30 dollars
C
15 dollars
D
5 dollars

Explanation

The 15% rate is annual, so for 4 months the interest rate is 15% × (4/12) = 5%. The interest is $200 × 0.05 = $10, so Jane will pay $10 in total interest. Choice A, 10 dollars, is correct.

AI-written and checked against the verified answer.

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