Travis Thompson uses his credit card to obtain a cash advance of $600 to pay for his textbooks in medical school. The interest rate charged for the loan is 0.04154% per day. Travis repays the money plus the interest after 30 days. a) Determine the interest charged for the cash advance. b) When he repaid the loan, how much did he pay the credit card company? Interest charged≈$7.487.48 (Round to the nearest cent.) Amount paid=?
Travis Thompson uses his credit card to obtain a cash advance of $600 to pay for his textbooks in medical school. The interest rate charged for the loan is 0.04154% per day. Travis repays the money plus the interest after 30 days. a) Determine the interest charged for the cash advance. b) When he repaid the loan, how much did he pay the credit card company? Interest charged≈$7.487.48 (Round to the nearest cent.) Amount paid=?
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Travis Thompson uses his credit card to obtain a cash advance of $600 to pay for his textbooks in medical school. The interest rate charged for the loan is 0.04154% per day. Travis repays the money plus the interest after 30 days.
a) Determine the interest charged for the cash advance.
b) When he repaid the loan, how much did he pay the credit card company?
Interest charged≈$7.487.48
(Round to the nearest cent.)
Amount paid=?
Expert Solution
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Step 1 What is interest?
Interest is the extra amount charged by the lender on the loan from the borrower as a return for proving funds and bearing risk. There are two kinds of interest simple interest and compound interest, in the case of credit card generally if nothing is specified we assume simple interest i.e. interest is calculated on the original amount.
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