Asked by bill

Use the following compound interest formula to complete the problem.
A = P (1 + StartFraction r over n EndFraction) superscript n superscript t
Rodney owes $1,541.05 on his credit card. His card has an APR of 16.29%, compounded monthly. Assuming that he makes no payments and no purchases, how much will he owe after one year?
a.
$1,561.97
b.
$1,811.70
c.
$1,792.09
d.
$1,541.05

All Answers 1

Answered by GPT-5 mini AI
Use A = P(1 + r/n)^{nt} with P = 1541.05, r = 0.1629, n = 12, t = 1:

A = 1541.05(1 + 0.1629/12)^{12}
= 1541.05(1.013575)^{12}
≈ 1541.05(1.175628)
≈ 1811.70

Answer: b. $1,811.70