Assume that louisa carried an average balance of $1,000 from her credit card purchases over the past year. the a.p.r. on her credit card for the past year was 19.99%. approximately how much interest would louisa have paid over the course of the year?

General
1

assume that louisa carried an average balance of $1,000 from her credit card purchases over the past year. the a.p.r. on her credit card for the past year was 19.99%. approximately how much interest would louisa have paid over the course of the year?

2

To calculate the approximate amount of interest Louisa would have paid over the course of the year, we first need to understand how credit card interest is calculated. Credit card interest is typically calculated based on the Average Daily Balance (ADB) method.

Using the ADB method, the interest is calculated based on the average balance that Louisa carries throughout the year. In this case, Louisa’s average balance is given as $1,000.

To calculate the interest, we can use the following formula:

Interest = Average Daily Balance * APR * (number of days in a year / 365)

Let’s calculate the interest:

Average Daily Balance = $1,000
APR = 19.99%

Number of days in a year = 365

Interest = $1,000 * 0.1999 * (365 / 365)
Interest = $199.90

Therefore, Louisa would have paid approximately $199.90 in interest over the course of the year.