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?
The term "Interest Cost" refers to the amount of money that is paid in interest for borrowing money or using credit. It is the additional amount that must be paid on top of the original loan or credit amount.
Reza D. is an individual who has borrowed money or used credit and is now being charged interest on that amount. Their interest cost is being mentioned because it is a significant factor in determining the total amount that must be repaid.
The total amount that Reza D. has to pay back is $686.25. This includes the original amount borrowed or used on credit, as well as the interest cost of 18¾% per annum (per year).
The interest cost is calculated by multiplying the original loan or credit amount by the interest rate (18¾% in this case) and then dividing by the number of periods in a year. This will give the amount of interest that must be paid for one year. This amount is then multiplied by the number of years the loan or credit is held to determine the total interest cost.
No, the interest cost is not a one-time fee. It is an ongoing cost that is charged for as long as the loan or credit is held. As the balance is paid off, the interest cost will decrease, but it will continue to accrue until the full balance is repaid.