Question

Your parents make a purchase of $2,975.34 using a popular reward credit card that gives you 1% cash back. If the credit card has a 13.5% APR and you do not make a payment the first month, how much is the difference between the interest and reward?
(1 point)
Responses

$29.75
$29.75

$371.92
$371.92

$3.72
$3.72

$33.47
$33.47

Answer 1

1% cash back = 0.01 × 2975.34 = $29.75

Monthly interest = (13.5%/12) × 2975.34 = 0.01125 × 2975.34 = $33.47

Difference = 33.47 − 29.75 = $3.72

Answer: $3.72