Approximately how much interest will Karen owe on her credit card next month if the balance she carried over from the previous month was $2,450 and her annual interest rate is 18 percent?

Karen will owe an interest amount of=$36.75

Explanation:

Step 1: Determine the total amount after a month

The total amount compounded annually can be expressed as;

A=P (1+R/n) ^ (nt)

where;

A=total amount

P=principal amount

r=annual interest rate

n=number of periods the interest is compounded annually

t=number of years

In our case;

A=unknown

P=$2,450

r=18%=18/100=0.18

n=12

t=1/12

replacing;

A=2,450 (1+0.18/12) ^ (12*1/12)

A=2,450 (1+0.18/12) ^1

A=2,450 (1.015)

A=$2,486.75

Step 2: Determine the interest amount after a month

Interest amount=total amount-principal amount

where;

total amount=$2,486.75

principal amount=$2,450

replacing;

Interest amount=2,486.75-2,450=$36.75

The interest amount=$36.75