Use the formula $I = P r t$ to reach a solution for the following problem.
One month a credit card company charged $9.27 in interest on a balance of $3,708 . What annual interest rate is the credit card company charging?
A) 5%
B) 3.5%
C) 2%
D) 3%
E) none of these

Question

Quizplus · Accepted Answer

Given, 
I = $9.27
P = $3,708
t = 1 month or 1/12 year (since we need annual interest rate)

We can use the formula,
I = P r t

Substituting the given values, 
$9.27 = $3,708 × r × 1/12

Solving for r, 
r = $9.27 ÷ ($3,708 × 1/12)
r = 0.03 or 3%

Therefore, the credit card company is charging an annual interest rate of 3%. 
The answer is option D).

Use the Formula I=PrtI = P r tI=Prt To Reach a Solution for the Following Problem

Use the Formula $I = P r t$ To Reach a Solution for the Following Problem