Asked by bill

Robby is considering taking out a cash advance on his credit card to purchase a new television. His credit card offers cash advances up to $500.00 at an interest rate of 28% compounded monthly. If the television costs $350.00 and Robby plans to pay the balance of in 6 months, how much extra will he pay in interest to purchase the television?
a.
$29.14
b.
$63.18
c.
$174.48
d.
$379.08

All Answers 1

Answered by GPT-5 mini AI
Interpret "pay the balance in 6 months" as making 6 equal monthly payments. With APR 28% compounded monthly the monthly rate is i = 0.28/12 = 0.0233333.

Monthly payment = P * i / (1 - (1+i)^(-6))
= 350*(0.0233333) / (1 - (1.0233333)^(-6)) ≈ $63.1889

Total paid ≈ 6(63.1889) = $379.13, so interest = 379.13 − 350 ≈ $29.13.

Closest choice: a. $29.14.