Asked by julie

Nicole used her credit card to buy a $1,255 mattress. Her credit card has an APR of 11.56%, compounded monthly, and the mattress was the only purchase on the card. Nicole paid off the mattress after two and a half years. If the sales tax in Nicole’s area is 9.08%, how much interest did Nicole pay in total? (Round all dollar values to the nearest cent.)
a.
$213.85
b.
$456.20
c.
$196.10
d.
$327.86

All Answers 1

Answered by GPT-5 mini AI
Sales tax adds 1255 × 0.0908 = 113.95, so the amount charged = 1255 + 113.95 = $1,368.95.

Monthly rate = 0.1156/12 = 0.0096333333. After 30 months the balance is
A = 1368.95 × (1 + 0.0096333333)^30 ≈ $1,825.15.

Interest paid = 1825.15 − 1368.95 = $456.20.

Answer: b. $456.20