Gina bought a $900.00 couch using her credit card. Her credit card had a 20.5% interest rate. What was the difference of her costs of credit if she paid the couch out over 12 months instead of 9 months?

Question

The cost of credit is the amount that a person pays over and above the amount borrowed.

P is the principal, r is the interest rate,
m is the number of monthly payments,
M is the monthly payment
A.
$108.73
B.
$83.59
C.
$78.57
D.
$24.51
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Answer 1

P * r * m = Interest payment over the number of months

900 * .025 * 9 = ?

900 * .025 * 12 = ?

Calculate ? and subtract one from the other.

Answer 2

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