Question

Zhan has a credit card charge of $250 on a card that charges 19% annual interest compounded daily. If he makes no other charges or payments on the account, what would be the balance of his account in 1 year? Round to the nearest whole dollar.
Explain your answer please :)

Answer 1

Answer:

The balance of Zhan's account in 1 year would be $ 302

Step-by-step explanation:

1. Let's review the information given to us to answer the question correctly:

Credit charge = $ 250

Interest rate = 19% compounded daily = 0.19/365 = 0.000520548

2. If Zhan makes no other charges or payments on the account, what would be the balance of his account in 1 year? Round to the nearest whole dollar.

Let's use the compound interest formula this way:

A = P * (1 + r/n) ⁿˣ, where:

A = final balance of the credit card

P = initial charge ($ 250)

r = interest rate  (0.19)

n = number of times interest applied per time period  (365 days)

x = number of time periods elapsed (1 year)

Replacing with the values we know we have:

A = 250 * (1 + 0.19/365)³⁶⁵

A = 250 * (1.000520548)³⁶⁵

A = 250 * 1.20918982

A = 302.297455

A = 302 (rounding to the nearest whole dollar)

Answer 2

Answer:

$\ 302$

Step-by-step explanation:

we know that    

The compound interest formula is equal to  

$A=P(1+\frac{r}{n})^{nt}$  

where  

A is the Final balance in the account  

P is the credit card charge

r is the rate of interest  in decimal

t is Number of Time Periods  

n is the number of times interest is compounded per year

in this problem we have  

$t=1\ years\\ P=\ 250\\ r=19\%=19\100=0.19\\n=365$  

substitute in the formula above

$A=250(1+\frac{0.19}{365})^{365*1}$  

$A=250(\frac{365.19}{365})^{365}$  

$A=\ 302.30$

Round to the nearest whole dollar.

$A=\ 302$