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Math Help - [SOLVED] Interest on credit card

  1. #1
    Ife
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    [SOLVED] Interest on credit card

    Hi, how would I calculate the amount due on a credit card balance of $4000 with daily interest of 0.7% for 2 months?
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  2. #2
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    Quote Originally Posted by Ife View Post
    Hi, how would I calculate the amount due on a credit card balance of $4000 with daily interest of 0.7% for 2 months?
    Is the annual rate 0.7% and it's compounded daily? Or, if 0.7% is a daily rate, how often is it compounded?

    The general formula for total amount due after n years (2 months would be 2/12 years) is 4000(1+\frac{r}{m})^{nm} Where r is the annual interest rate, m is the compounding period and n is the number of years. If it is an annual rate of 0.7% and it's compounded daily for 2 months you get 4000(1+\frac{0.007}{12})^{\frac{2}{12}*12}
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  3. #3
    Ife
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    thanks a lot. i had the same working. just needed confirmation. thanks again
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