A retailer offers a revolving credit account to its customers;interest is charged at 18 percent per year.If a customer buys $400 in merchandise in November and carries the total balance over for one month,how much must the customer remit to pay the account in full?
A)$400
B)$403
C)$406
D)$409

Question

Quizplus · Accepted Answer

The interest charged for one month on the balance of $400 is calculated as follows:

18% annual rate = 1.5% monthly rate (18%/12)
Interest charged = $400 x 1.5% = $6

Therefore, the total amount the customer owes after one month is $406 ($400 + $6). To pay the account in full, the customer must remit $406.

A Retailer Offers a Revolving Credit Account to Its Customers;interest