SOLUTION: please! could you help me again in these problems and i can no twork out these. Items 26 and 27 are based on the following information. Bank credit cards are a

Question 33722This question is from textbook Money, Business and Interest
: please! could you help me again in these problems and i can no twork out these.
Items 26 and 27 are based on the following information.

Bank credit cards are a convenient and a popular method of payment. Annual interest rates for purchases that have been made with bank credit vary, however. In New York, bankA charges 10% interest, bank B 15% interest, bank C 16% interest, and bank D 18% interest. In addition, each bank charges a $ 25 annual fee for its card.

1) Bud charged a $588 couch on his card from bank B. If he pays for the couch in a year, how much interest will he pay?

2) Maria charged $29 and $84 on her card from bank D. If she plans to pay her balance in three months, what is the total she must pay?

From your poor students

This question is from textbook Money, Business and Interest

Answer by Nate(3500) (Show Source): You can put this solution on YOUR website!
the equation for interest is:
Y = A(1+r)^t
where y is the final amount
where a is the initial amount
where r is the rate
where t is the time in years
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1) Bud charged a $588 couch on his card from bank B. If he pays for the couch in a year, how much interest will he pay?
y = 588(1.15)^1
y = 676.2
676.2-588=88.2
the interest would be $88.20
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2) Maria charged $29 and $84 on her card from bank D. If she plans to pay her balance in three months, what is the total she must pay?
y = (29+84)(1.18)^(1/4)
y = (113)(1.18)^(1/4)
y = 117.77
117.77-113 = 4.77
the interest would be $4.77
-Attention-
these interests are not included with the annual fee for the card
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