Pierre owns a restaurant. He has an overdraft line of credit. Each overdraft transaction costs $7.82, plus interest at 12%/yr. On Wednesday, Pierre had 4 overdraft transactions for $96.54. He paid back the money in 15 d. How much is the interest?

Question

Pierre owns a restaurant. He has an overdraft line of credit. Each overdraft transaction costs $7.82, plus interest at 12%/yr. On Wednesday, Pierre had 4 overdraft transactions for $96.54. He paid back the money in 15 d. How much is the interest?

A- 0.54
B- 0.49
C- 0.47
D- 0.48

Answer 1

First, let's calculate the total cost of the overdraft transactions:

4 overdraft transactions x $7.82 = $31.28

Now, let's calculate the total amount Pierre had to pay back:
$31.28 (overdraft fees) + $96.54 (transaction amount) = $127.82

Next, let's calculate the interest Pierre has to pay for borrowing this amount for 15 days:
$127.82 x 0.12 (annual interest rate) x (15/365) = $0.62

Therefore, the closest answer choice is:

D- 0.48