# Math

Katherine uses her credit card to purchase a new television for \$709.15. She can pay off up to \$350 per month. The card has an annual rate of 25.7% compounded monthly.

How much will she pay in interest?

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3. 👁 1,257
1. interest for 1st month = 709.15(.257)/12 = 15.19
balance at end of 1st month = 709.15 + 15.19 - 350
= 374.34

interest for 2nd month = 374.34(.257)/12 = 8.02
balance at end of 2nd month = 374.34 + 8.02 - 350
= 32.35

interest for 3rd month = 32.35(.257)/12 = .69
amount due = 32.35 + .69
= 33.04

** So the total she paid for her \$709.15 TV was
350+350+3304 = \$733.04

her interest paid = 733.04 - 709.15 = \$23.89

the calculation shown as ** is actually not valid even though it is done all the time. We cannot add up amounts of money that are not at the same "time spot".

e.g. If I deposit \$500 now and another \$500 two years from now , I will not have \$1000 two years from now, unless I totally disregard any interest rate.

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2. Thank you so much for the explanation.

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2. 👎 0
3. not sure what the exact answer is here you should have stated the answer clearly

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2. 👎 0

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