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
Monthly rate = 0.28/12 = 7/300 ≈ 0.0233333.
If he amortizes $350 over 6 months, the monthly payment is
P = 350 * r / (1 - (1+r)^(-6)) ≈ 350*(7/300) / (1 - (307/300)^(-6)) ≈ $63.19.

Total paid ≈ 6(63.19) ≈ $379.14, so interest ≈ 379.14 − 350 = $29.14.

Answer: a. $29.14