- #1
mech-eng
- 828
- 13
Moved from a technical math section, so missing the template
"Many credit card companies target entering college freshmen with attractive interest rates. What they do not emphasize, however, is that the low rate will be in effect for only a short time, changing automatically to a much higher rate, often in just a few months. Freshman Michael Bronson accepts a credit card offer at %8 annual interest on any
unpaid charges. The rate will increase to 15% annually after 6 months. To furnish his dorm room, he charges a small refrigerator, some bedding, and personal supplies amounting to $457.80. When he receives his first month's bill, he finds that he can pay just a minimum amount of $87.50.
a) If Michael pays the minumum amount and makes no additional charges, how much will he owe the following month.
(answer: 372.77)
b) Suppose Michael continues to pay the same minimum amount for 4 more months. What will he owe at the end of the next month.(answer:26.94)
c) The minumum amount normally is reduced as the total charge is reduced. Suppose each month, the minumum is reduced by $15 and Michael continues to pay only the minumum. can be pay off the charges in 6 months? If not, what will he owe at the
end of 6 months? (answer: no, 166.45)
This from the book Mathematics with Applications by Lial/Hungerford. First of all I cannot understand the parts "at %8 annual interest on any unpaid charges." and "When he receives his first month's bill, he finds that he can pay just a minumum amount of $87.50". What do these parts refer to ? I am not a native English speaker and I do not know
these concepts very well. I have search for the solution on the internet but have found nothing.
My approach for question part a is 457.80-87.50=370.300 but the answer is 372.27
Thank you.
unpaid charges. The rate will increase to 15% annually after 6 months. To furnish his dorm room, he charges a small refrigerator, some bedding, and personal supplies amounting to $457.80. When he receives his first month's bill, he finds that he can pay just a minimum amount of $87.50.
a) If Michael pays the minumum amount and makes no additional charges, how much will he owe the following month.
(answer: 372.77)
b) Suppose Michael continues to pay the same minimum amount for 4 more months. What will he owe at the end of the next month.(answer:26.94)
c) The minumum amount normally is reduced as the total charge is reduced. Suppose each month, the minumum is reduced by $15 and Michael continues to pay only the minumum. can be pay off the charges in 6 months? If not, what will he owe at the
end of 6 months? (answer: no, 166.45)
This from the book Mathematics with Applications by Lial/Hungerford. First of all I cannot understand the parts "at %8 annual interest on any unpaid charges." and "When he receives his first month's bill, he finds that he can pay just a minumum amount of $87.50". What do these parts refer to ? I am not a native English speaker and I do not know
these concepts very well. I have search for the solution on the internet but have found nothing.
My approach for question part a is 457.80-87.50=370.300 but the answer is 372.27
Thank you.