Question

Question
If a mechanic uses his credit card to pay for a compressor that costs $477.95 and does not pay on it until the second month, what will the 1.5% monthly interest charge be at the end of the first month?

(1 point)
Responses

$7.17

$7.17

$12.83

$12.83

$15.43

$15.43

$22.06

Answer 1

To calculate the 1.5% monthly interest charge on a compressor that costs $477.95, you can use the following formula:

Interest Charge = Principal Amount × Interest Rate

Here, the principal amount is $477.95 and the interest rate is 1.5% (or 0.015 in decimal form).

So,

Interest Charge = $477.95 × 0.015

Now, let's calculate it:

Interest Charge = $477.95 × 0.015 = $7.16925

Rounding this to two decimal places, the interest charge at the end of the first month will be approximately $7.17.

Therefore, the correct response is:

**$7.17**