ECONOMICS
COMPOUND INTEREST
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Greyson used his credit card to buy a 90-inch HD flat-screen TV for $2, 600. The credit card company charges 28% compound interest per year. If Greyson made no payments for 2 years, how much would he owe the credit card company?
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$5, 069.84
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$4, 772.18
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$4, 259.84
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$4, 056.00
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Explanation:
Detailed explanation-1: -Cash advance fee: This is the fee charged every time you withdraw cash using your Credit Card. Typically, it ranges from 2.5% to 3% of the transaction amount, subject to a minimum amount of Rs 250 to Rs 500 and is reflected in the billing statement.
Detailed explanation-2: -Pay off your balance in full each month before your grace period ends to avoid interest charges.
Detailed explanation-3: -Divide the 25% purchase APR by days in a year. 0.25 / 365 = 0.00068493 daily periodic rate. Multiply that number by the average daily balance. 0.00068493 x $5, 000 = $3.42465753. Multiply by the number of days in your billing cycle to get your monthly interest charge. 17-Jan-2023
There is 1 question to complete.