Interest is a concept familiar to most people: every credit card in existence has a term called annual percentage rate (APR), which is an interest rate. Suppose you charged $1,000 to a credit card that has a minimum payment each month equal to the interest owed. Can you figure out how much the interest rate is based on this amount?

The formula for simple interest is where I is the amount you will pay in interest, r is the rate at which interest will accrue, P is the principal (amount borrowed), and m is the number of times the interest is applied.

To solve for the interest rate of your credit card, you need to understand which variables in the above formula you have. If your minimum monthly payment is $22 on the $1,000 credit card bill, which variables do you know the values of?

To solve for the interest rate of your credit card, we can use the formula for simple interest:

I = P * r * m

In this equation:
- I represents the amount you will pay in interest.
- P represents the principal, which is the amount borrowed.
- r represents the interest rate.
- m represents the number of times the interest is applied.

Given that your minimum monthly payment is $22, we can assume that this minimum payment covers only the interest owed. Therefore, the amount you will pay in interest is equal to the minimum monthly payment, which is $22.

The principal, P, is the amount borrowed, which in this case is $1,000.

The number of times the interest is applied, m, depends on the frequency of the interest compounding. Typically, credit cards compound interest monthly. Therefore, in this case, m would be equal to 12, representing 12 months in a year.

Now, with the values of I, P, and m determined, we can rearrange the formula to solve for the interest rate, r:

r = I / (P * m)

Substituting the known values:

r = 22 / (1000 * 12)

Calculating this expression will give you the interest rate of your credit card.