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

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) (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 .
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 = .
Repeating the pattern, after 12 months her balance = .
Use a calculator and you get $1847.16 as the balance after 12 months.