Question

Suppose a credit card charges a 10% annual interest rate and recognizes the out- standing balance at the end of every month.

A. 200.8 B. 167.4 C. 250 D. 252.1 E. None of the above:

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Answer #1

Answer to the following quetion:

Option c: 250.

Explanation: If someone is having an outstanding balance of $10000 for 1 year (12 months) then, at 10% Rate of Interest he will have to pay an annual interest of 1000 (i.e. 10% of 10000). 3 months is one quater year and thus, the person has to pay 1/4th of the 1000 i.e. 250.

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