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Suppose you purchase $3300 worth of flooring on an account charging 2.044% interest per month on the account balance. Find the interest charge added to the account balance at the end of the first, second, and third months.

 

The interest charge added at the end of the first month is $_____.

 Dec 6, 2017
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Since the interest rate is compounded monthly, then you have:

 

$3,300 x 2.044% =$67.45 Interest charge at the end of the first month.

$3,300 + $67.45 =$3,367.45 Principal + interest at the end of the first month.

 

$3,367.45 x 2.044% =$68.83 Interest charge at the end of the second month.

$3,367.45 + $68.83 =$3,436.28 Interest + principal at the end of the second month.

 

$3,436.28 x 2.044% =$70.24 Interest charge at the end of the third month.

$3,436.28 + $70.24  =$3,506.52 Principal + interest at the end of the third month.

 Dec 7, 2017

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