Question

If the credit card in problem #3 has an interest rate of 14.75% and you do not make a payment the first month on that $1,685.90 balance, how much is the difference between the interest and reward?
(1 point)
Responses

$17.91
$17.91

$88.51
$88.51

$13.00
$13.00

$32.31

Answer 1

First find the one-month interest:
Monthly rate = 14.75%/12 = 0.012291667
Interest = 1685.90 × 0.012291667 ≈ $20.72

If the card gives 2% rewards:
Reward = 1685.90 × 0.02 = $33.72

Difference (reward − interest) = 33.72 − 20.72 ≈ $13.00

Answer: $13.00