Please help me with this answer Task 2: Interest in Finance
Interest is a concept familiar to most people: every credit card in existence has a term called
annual percentage rate (APR), which is an interest rate. Suppose you charged $1,000 to a
credit card that has a minimum payment each month equal to the interest owed. Can you
figure out how much the interest rate is based on this amount?
The formula for simple interest is l=rxPxm, where / is the amount you will pay in interest,
is the rate at which interest will accrue, P is the principal (amount borrowed), and m is the
number of times the interest is applied.
a. To solve for the interest rate of your credit card, you need to understand which variables
in the above formula you have. If your minimum monthly payment is $22 on the $1,000
credit card bill, which variables do you know the values of?
Type your response here:
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b. Manipulate the formula so it will calculate the interest rate you are paying instead of the
amount of money you are paying.
Type your response here:
c. Now that you have a formula that will give you the interest rate, plug in the values for the
problem and solve for that interest rate. Interest rates are usually represented for a time
period: over what time period does this rate apply? What would the interest rate be if it
were a yearly rate?