SOLUTION: i can't figure this one out. Credit card interest. Thanks for your help. A bank credit card charges interest at the rate of 21% per year, compounded monthly. If a senior in c

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Question 62159This question is from textbook college algebra
: i can't figure this one out. Credit card interest. Thanks for your help.
A bank credit card charges interest at the rate of 21% per year, compounded monthly. If a senior in college chares her last tuition bill of $1,500 and intends to pay it in one year, what will she have to pay.
Thanks again. This question is from textbook college algebra

Answer by joyofmath(189) About Me  (Show Source):
You can put this solution on YOUR website!
A bank credit card charges interest at the rate of 21% per year, compounded monthly. If a senior in college chares her last tuition bill of $1,500 and intends to pay it in one year, what will she have to pay.
21% per year interest = 21/12 = 1 3/4% per month = .0175.
If the student charges $1500 then after one month she'll owe 1500 (balance) + .0175*1500 (interest). We can write the balance after 1 month as 1500%2A1.0175.
After 2 months she'll owe 1500*1.0175 times another 1.0175 on the balance after the first month plus its interest. The balance after 2 months = 1500%2A1.0175%5E2.
Repeating the pattern, after 12 months her balance = 1500%2A1.0175%5E12.
Use a calculator and you get $1847.16 as the balance after 12 months.