Question

You make a purchase of $1,987.54 using a rewards credit card that gives you 2% cash back. If the credit card has a 17.75% APR and you do not make a payment the first month, how much is the difference between the first month's interest and the reward?
(1 point)
Responses

$10.35
$10.35

$19.48
$19.48

$29.40
$29.40

$28.81

Answer 1

2% cash back = 0.02 × $1,987.54 = $39.75

Monthly interest = (17.75% / 12) × $1,987.54 = 0.1775/12 × $1,987.54 ≈ $29.40

Difference = $39.75 − $29.40 = $10.35

Answer: $10.35