Question

Sam is getting ready for a big date when he realizes that he has no money. his roommate, Bill, also has no money, but he has a credit card. knowing that nobody will let Sam use Bill's credit card, Sam asks Bill to put out a cash advance for $120.00. Bill agrees under the condition that Sam is responsible for all interest that accrues on the cash advance which is 30% interest rate, compounded monthly. The $120 cash advance is repaid in monthly installments over 5 years. How much should Bill ask Sam to pay in interest for the cash advance?

Answer 1

Answer:

b 112.80

Step-by-step explanation:

took test on edge

Answer 2

The interest that accrues on the initial down payment at 30% interest rate is  $408 .

What is interest?

The term interest refers to money that accrues on a principal sum. It is commonly employed in the parlance of borrowing money.

Since it is a compound interest;

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

Where;

A = amount

P = principal

r = rate

n = number of times compounded per year

t = total time taken

A = 120(1 + 0.025)^12 × 5

A = $528

A = P + I

I = A - P

I = $528  - $120

I = $408

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