Question

If a florist uses her credit card to pay for a new window display that costs $1,242 and does not pay on it until the second month, what will the 1.25% monthly interest charge be at the end of the first month?

(1 point)
Responses

$12.83

$12.83

$15.53

$15.53

$16.00

$16.00

$17.17

Answer 1

To calculate the monthly interest charge on the window display cost of $1,242 at a monthly interest rate of 1.25%, you can use the following formula:

\[
\text{Interest} = \text{Principal} \times \text{Rate}
\]

Where:
- Principal = $1,242
- Rate = 1.25% = 0.0125 (as a decimal)

Now, plug in the values:

\[
\text{Interest} = 1,242 \times 0.0125
\]

Calculating the interest:

\[
\text{Interest} = 1,242 \times 0.0125 = 15.525
\]

Rounding to two decimal places, the interest charge at the end of the first month is approximately $15.53.

So, the correct response is:

**$15.53**