Hello,
Her's the problem : Jeff has an electric bill of $130.50 that is two months overdue.
1. If the electric company change simple interest at a montly rate of 1.35% for overdue bills, how much interest would he owe ?
I found: 176,175 = ($130.50 x 0.0135 )
2. If the electric company charges simple interest at an annual rate of 14.4% for overdue bills, how much interest would he owe ?
I found : 225,505 since ( 130,50 x 0,144 x 12 )
Let me know guys !
Thank you :)
You didn't get it quite right:
1-He is charged interest at a rate 1.35% per month. Since his bill is two months in arears, he will have to pay them: $130.5 X .0135=$1.76 for one month X 2=$3.52 for two months. So, in total he will owe them $130.5 + $3.52=$134.02
2-If he doesn't pay it for the whole year, then he gets charged 14.4% interest. If this is compounded annually, then he will owe them:$130.50 X 1.144=$149.29. And that's all. If the interest rate is compounded say, monthly, then he will owe them:$150.58.
