A credit card has an APR of 18%. If you carry a $1000 balance for one month, how much interest do you owe?
Answer
$15
How to solve it
1
Balance: $1000
2
APR: 18%
3
Monthly rate: 18% ÷ 12 = 1.5%
4
Interest: $1000 × 0.015 = $15
Hints
Divide annual rate by 12 for monthly
Apply to the balance