To calculate the monthly interest charge on a $1,200 treadmill purchased with a credit card at an interest rate of 9.95%, let's follow the steps outlined in the explanation.
Step 1: Convert the percentage to a decimal
To convert the percentage to a decimal, divide by 100: \[ 9.95% = \frac{9.95}{100} = 0.0995 \]
Step 2: Calculate the monthly interest charge
Next, multiply the balance by the decimal interest rate to find the monthly interest charge: \[ \text{Monthly interest charge} = \text{Balance} \times \text{Interest Rate} \] Substituting in the values: \[ \text{Monthly interest charge} = 1200 \times 0.0995 \]
Step 3: Perform the calculation
Now, let's calculate it: \[ 1200 \times 0.0995 = 119.4 \]
Conclusion
Therefore, the monthly interest charge at the end of the first month would be $119.40.