Jamie wants a new smart TV/sound system that costs $1,250. He does not have that much in cash to purchase it, so he uses a credit card with 18% annual interest. He puts $250 down, but he only pays the interest each month on that credit card debt. About how much will he pay in interest over 4 years?
Answers
Step-by-step explanation:
this is your answer
I hope this helps u
so please mark me as a branlist
Given: Jamie wants a new smart TV/sound system that costs $1,250. He does not have that much in cash to purchase it, so he uses a credit card with 18% annual interest. He puts $250 down, but he only pays the interest each month on that credit card debt.
To find: Money to be paid over 4 years
Explanation: Total cost of the TV = $1,250
Money given as down payment= $250
Therefore, credit card debt
= Total cost- Money given as down payment
= $1,250-$250
= $1,000
Let the principal be p, rate of interest be r and time be t years.
p = $1,000
r = 18%
t= 4 years
The interest on the principal is:
= p × r × t /100
= 1000 × 18 × 4/100
= 720
Therefore, interest is $720.
Total money to be paid over 4 years
= Principal+ Interest on the principal
= $1,000+$720
= $1,720
Therefore, Jamie pays $1,720 in interest over 4 years.