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Find the monthly interest payments in the situation described. Assume that monthly interest rates are 1/12 of annual interest rates
Ashton maintains an average balance of $1000 on his credit card which carries an annual interest rate of 15%
A.$1500
B.$12.50
C.$125
D.$150

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abiolataiwo2015

The monthly interest payment is: B. $12.50.

Monthly interest payment

First step is to find the average monthly interest rate

Average monthly interest rate=1/12× 15%

Average monthly interest rate= 1.25%

Second step is to calculate the monthly interest payments

Monthly interest payments=1.25%× $1,000

Monthly interest payments=$12.50

Inconclusion the monthly interest payment is: B. $12.50.

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