in november , tracey had an average daily balance of $ 1178.11 . the interest rate on her card is 18 1/2 %…

in november , tracey had an average daily balance of $ 1178.11 . the interest rate on her card is 18 1/2 %. what is the interest charge for the month of november ?

in november , tracey had an average daily balance of $ 1178.11 . the interest rate on her card is 18 1/2 %. what is the interest charge for the month of november ?

Answer

Explanation:

Step1: Convert interest rate to decimal

The interest rate is $18\frac{1}{2}%=\frac{37}{2}% = 0.185$.

Step2: Calculate monthly - interest rate

Since there are 12 months in a year, the monthly interest rate $r=\frac{0.185}{12}$.

Step3: Calculate interest charge

The interest charge $I$ is calculated by multiplying the average daily balance $B = 1178.11$ by the monthly interest rate. So $I=1178.11\times\frac{0.185}{12}$. $I = 1178.11\times0.0154167\approx18.16$.

Answer:

$18.16$