How much annual interest would you pay on a $1000 charge with a credit card that has an 18% interest rate?

Unlock all questions

This demo includes only 20 questions. Upgrade to access hundreds of questions, flashcards, exam simulations, and disable ads.

Full question bankExam simulationsFlashcards
From $25.99Unlock all

Explore the KOSSA Marketing Test with interactive flashcards and multiple choice questions. Prepare to excel with hints and detailed explanations. Start your study journey now!

Multiple Choice

How much annual interest would you pay on a $1000 charge with a credit card that has an 18% interest rate?

Explanation:
To determine the annual interest on a $1000 charge with an 18% interest rate, you calculate it by multiplying the principal amount (which is $1000) by the interest rate (expressed as a decimal). Here’s the calculation: 1. Convert the percentage to a decimal by dividing by 100. This gives you 18% as 0.18. 2. Multiply the principal amount by the decimal interest rate: \( 1000 \times 0.18 = 180 \). This means the total annual interest you would pay on a $1000 charge is $180. The correct answer reflects this calculation accurately, demonstrating a clear understanding of how to calculate interest based on a given rate.

To determine the annual interest on a $1000 charge with an 18% interest rate, you calculate it by multiplying the principal amount (which is $1000) by the interest rate (expressed as a decimal).

Here’s the calculation:

  1. Convert the percentage to a decimal by dividing by 100. This gives you 18% as 0.18.

  2. Multiply the principal amount by the decimal interest rate:

( 1000 \times 0.18 = 180 ).

This means the total annual interest you would pay on a $1000 charge is $180. The correct answer reflects this calculation accurately, demonstrating a clear understanding of how to calculate interest based on a given rate.

More Multiple Choice Questions
Subscribe

Get the latest from Passetra

You can unsubscribe at any time. Read our privacy policy