what is the monthly interest payment for an account with a balance of $120.00 and an a.p.r. of 20%? $? round…

what is the monthly interest payment for an account with a balance of $120.00 and an a.p.r. of 20%? $? round to the nearest cent.

what is the monthly interest payment for an account with a balance of $120.00 and an a.p.r. of 20%? $? round to the nearest cent.

Answer

Explanation:

Step1: Recall the formula for monthly interest

The formula for monthly interest payment is ( \text{Monthly Interest} = \text{Balance} \times \frac{\text{APR}}{12} ), since APR is the annual percentage rate and we need the monthly rate (so divide by 12).

Step2: Plug in the values

The balance is $120.00 and the APR is 20% or 0.20 in decimal. So we calculate ( 120 \times \frac{0.20}{12} ). First, simplify ( \frac{0.20}{12}=\frac{1}{60}\approx0.016666... ) Then, ( 120\times0.016666... = 2.0 ) (exactly, since ( 120\div60 = 2 )).

Answer:

( $2.00 )