Derek used her credit card to buy a hay ride for him and his friends. The ride cost $500 plus 5% GST. He did not pay his bill within the grace period and must pay interest on his bill. The interest rate is 15% compounded daily from the date of purchase.

Question

Derek used her credit card to buy a hay ride for him and his friends. The ride cost $500 plus 5% GST. He did not pay his bill within the grace period and must pay interest on his bill. The interest rate is 15% compounded daily from the date of purchase.

A) What is the total amount of hay ride with taxes?

B) At $120 per month, how long will it take Derek to pay off the balance?

C) How much will he pay in interest, paying $120 monthly?

Thanks!!!!

Answer 1

Derek used her credit card to buy a hay ride for him and his friends. The ride cost $500 plus 5% GST. He did not pay his bill within the grace period and must pay interest on his bill. The interest rate is 15% compounded daily from the date of purchase.

A. Po = 500 + 0.05*500 = $525. = Initial principal or cost.