MHB Interest Cost for Reza D. ($686.25 @ 18¾% p.a.)

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Reza D. had a credit card balance of $686.25 for 35 days, incurring interest at an annual rate of 18¾%. The interest calculation, typically compounded daily, results in a total interest charge of approximately $11.25. Therefore, Reza's total payment to the credit card company amounted to $697.50. Credit card companies often use a 360-day year for interest calculations, which can slightly increase the total interest owed. Understanding these calculations is crucial for managing credit card debt effectively.
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.A certain credit card company charges interest at 18¾% p.a. Reza D. had an outstanding balance of $686.25 on his credit card for 35 days, at which time he paid everything that he owed to the company. How much interest did Reza have to pay, and how much did he pay in total?
 
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sillypoodle said:
.A certain credit card company charges interest at 18¾% p.a. Reza D. had an outstanding balance of $686.25 on his credit card for 35 days, at which time he paid everything that he owed to the company. How much interest did Reza have to pay, and how much did he pay in total?

link to the compound interest formula ...

Compound InterestFYI, credit card companies usually charge interest compounded daily. Some use 360 days in a year to slightly increase their interest charge.
 

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