You got a new credit card with an interest rate of 18% compounded monthly and no minimum payment. you go on a shopping spree and purchase $10,000 worth of clothes and shoes. If you wait 6 months to pay the bill, how much more will you owe than if you had paid the bill immediately?

Question

Mathematics

Orlando Horn

5 January, 00:35

You got a new credit card with an interest rate of 18% compounded monthly and no minimum payment. you go on a shopping spree and purchase $10,000 worth of clothes and shoes. If you wait 6 months to pay the bill, how much more will you owe than if you had paid the bill immediately?

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Answers (1)

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Lilliana Hester · Answer 1

The total amount owed after 6 months will be found using the formula:

FV=P (1+r/100*n) ^n

P=principle=$10000

r=rate=18%

n=terms=0.5

FV=10000 (1+18/2*100) ^0.5

FV=$10,440.30651

Thus the amount owed will be $10440.30651